Sector Update October 20, 2014 Oil & gas Rating Matrix Company CMP Target Price Rating ONGC 422 519 Buy GAIL 455 554 Buy Oil India 589 778 Buy IOCL 379 452 Buy HPCL 518 626 Buy Gujarat Gas 495 395 Hold IGL 421 390 Hold EPS Estimates Company FY15E FY16E FY17E ONGC 32.9 43.8 52.5 GAIL 33.3 42.8 NA Oil India 60.4 75.4 89.3 IOCL 33.1 33.0 NA HPCL 42.5 60.7 NA Gujarat Gas 30.3 30.9 NA IGL 32.3 32.8 NA P/E ratio estimates Company FY15E FY16E FY17E ONGC 12.4 9.3 7.8 GAIL 13.7 10.7 NA Oil India 10.0 8.0 6.8 IOCL 10.4 10.5 NA HPCL 10.0 7.0 NA Gujarat Gas 16.7 16.4 NA IGL 13.1 12.9 NA P/BV ratio estimates Company FY15E FY16E FY17E ONGC 1.9 1.7 1.5 GAIL 2.0 1.7 NA Oil India 1.6 1.4 1.2 IOCL 1.2 1.1 NA HPCL 0.9 0.8 NA Gujarat Gas 4.5 4.0 NA IGL 2.8 2.4 NA Analyst Mayur Matani Mayur.matani@icicisecurities.com Utkarsh Tathagath utkarsh.tathagath@icicisecurities.com First big ticket reforms by government The Cabinet Committee on Economic Affairs (CCEA) on Saturday initiated some major policy decisions pertaining to the oil & gas sector. The new government took some bold steps to start off the reforms process. The Finance Minister announced the following reforms: 1) diesel price deregulation 2) new gas pricing of US$5.6 per mmbtu 3) modified direct benefit transfer scheme in LPG and 4) policy framework for relaxations of PSC norms. Diesel price deregulation bold move in right time The government s move to announce a cut in diesel prices by 3.4 per litre and deregulate diesel prices comes at the right time when there has been a sharp decline in crude oil prices. Diesel prices will be market determined at both retail and refinery gate level for all consumers. The move to deregulate diesel prices will lead to a decline in crude oil gross under-recoveries, with only kerosene and LPG prices under the regulatory regime. The gross under-recoveries are now expected to decline from 139869 crore in FY14 to 83,326.5 crore in FY16E. ONGC, Oil India and PSU downstream companies would be the key beneficiaries and may see a reduction in their net subsidy burden, going forward. We expect more reforms from the government on the subsidy sharing mechanism, wherein lower subsidy burden needs to be set for upstream and downstream companies. We expect the decision on the subsidy sharing mechanism to come sooner than later, given the strong government and political sensitivity of the decision being the least. We expect net oil realisation for ONGC at $44.1/bbl, $45.5/bbl and $57.5/bbl for FY15E, FY16E and FY17E and for Oil India at $50.9/bbl, $53/bbl and $65/bbl for FY15E, FY16E and FY17E, respectively. For downstream companies, we expect the net subsidy burden to reduce from 1.5% in FY14 to 1% and 0.5% in FY15E and FY16E, respectively. Deregulation of diesel prices will facilitate greater competition in the auto fuels retail segment and enhanced efficiency in service delivery of oil companies. The deregulation of diesel also opens up the sector to private players like Reliance and Essar Oil to open retail outlets and compete with PSU companies. OMCs also stand to benefit if they are able to increase their diesel marketing margins by 0.5 per litre (HPCL to benefit the most among OMCs). New domestic gas price of US$5.6 per mmbtu The CCEA also tweaked the gas pricing formula of the previous government by raising gas prices to US$5.6 per mmbtu on a gross calorific value (GCV) basis. Hence, the net calorific value (NCV) works out to ~US$6.2 per mmbtu, which is comparable to the earlier price of US$4.2 per mmbtu on a NCV basis. The gas price for new discoveries in deepwater areas would also be at a premium to new prices. Although the new price is below our estimates, we believe the hike is positive as it a step in the right direction. The new gas price would be applicable from November 1, 2014 with a revision every six months beginning April 1, 2015. The new price is based on the modification to the Rangarajan formula. ONGC and Oil India would be the major beneficiaries of this price hike as they are the largest producers of gas in the country.
The CCEA made the following changes to the Rangarajan formula: Removal of both the Japanese and Indian LNG import components in the formula Consideration of Alberta Gas Reference price in place of Henry Hub Prices for Canadian consumption Consideration of Russian actual price in place of National Balancing Point price for Russian consumption considered under Former Soviet Union (FSU) countries Consideration of appropriate deductions on account of transportation & treatment charges, etc., for different hub prices The options of bi-annual and annual price revision instead of quarterly revision may be considered The modified Rangarajan formula is as follows: P = (VHH * PHH) + (VAC * PAC) + (VNBP * PNBP) + (VR * PR) / (VHH + VAC + VNBP + VR) Where (a) VHH = Total annual volume of natural gas consumed in USA & Mexico. (b) VAC = Total annual volume of natural gas consumed in Canada. (c) VNBP = Total annual volume of natural gas consumed in EU and FSU, excluding Russia. (d) VR = Total annual volume of natural gas consumed in Russia. (e) PHH and PNBP are the annual average of daily prices at Henry Hub (HH) and National Balancing Point (NBP) less the transportation and treatment charges. (f) PAC and PR are the annual average of monthly prices at Alberta Hub and Russia, respectively, less the transportation and treatment charges. A premium in pricing in ultra deep water areas, deep water areas and high pressure-high temperature areas would be beneficiary for oil upstream companies as the gas discoveries would become viable, thus leading to higher investments in offshore gas discoveries and higher gas production in future. As far as Reliance Industries is concerned, the matter relating to cost recovery on account of shortfall in envisaged production from D1, D3 discoveries of Block KG-DWN-98-3 is under arbitration. Hence the operator would be paid the earlier price of US$4.2 per mmbtu till the shortfall quantity of gas is made good. It is proposed that the difference between the revised price and the present price (US$4.2 per million BTU) would be credited to the gas pool account maintained by Gail and whether the amount so collected is payable or not, to the contractors of this Block, would be dependent on the outcome of the award of pending arbitration and any attendant legal proceedings. The gas price hike decision would be neutral for gas utilities as we believe higher gas costs would be passed on to customers. We expect CNG and PNG prices to be hiked by 4-4.5 per kg and 2-2.5 per scm, respectively to pass on higher costs to customers. As gas is the feedstock for Gail s petrochemical and LPG business, the gas hike will have a negative impact on Gail. However, we believe the reduction in Gail s subsidy burden from 1901.3 crore in FY14 to 1400 crore and 1000 crore in FY15E and FY16E, respectively, would neutralise the negative impact of the gas price hike. Page 2
Modified direct benefit transfer scheme in LPG (DBTL) The CCEA has also approved the Modified Direct Benefit Transfer Scheme in LPG being re-launched in 54 districts from mid-november, 2014 and in rest of country from January 1, 2015. The Cabinet revisited the scheme design and processes and it approved the Modified DBTL. The salient features of the Modified DBTL scheme are as follows: The subsidy per domestic subsidised cylinder shall be fixed. All LPG consumers who join the modified DBTL scheme in future can receive LPG cash subsidy In this scheme, the consumer will have to pay full market price of the cylinder and the consumer will get the subsidy transferred in the bank account as soon as the refill is booked. This will help the government to target the subsidy in a better and more organised manner, thereby repairing government finances. Policy framework for relaxations of stringent PSC norms CCEA approved the proposal of Ministry of Petroleum and Natural Gas regarding Policy Framework for Relaxations, Extensions and clarifications at the Development and Production stage under PSC regime for early Monetization of hydrocarbon discoveries. There are reform initiatives, which would help in monetisation of some of the pending discoveries, lead to resolution of various long pending operational issues, which are hampering E&P operations and create a better climate for investment. The salient features of this reform measure are as follows:- Extension of Appraisal period for submission of Declaration of Commerciality (DOC) in respect of hydrocarbon discovery. Extension of time period for submission of Field Development Plan (FDP) after review of DOC by the Management Committee. Reduction in Minimum Work Program (MWP) in case a block or its part is unavailable for exploration activities consequent to denial of permission by government agencies Swapping of 2D and 3D Seismic Minimum Work Programme, on the request of the operator In cases where the committed minimum work programme of any particular exploration phase is incomplete, entry into subsequent exploration phases would be permitted after paying cost of unfinished MWP of previous phases. Condoning delays in submission of notice for entering into next phase. Condoning delays in submission of Annual Work Programme and Budget and the appraisal work programme Permission for drilling of appraisal wells after submission of DOC Probing additional reservoirs during appraisal programme Acceptance of discoveries for which notification to the government has not been made while notification for testing has also not been provided as prescribed These changes do not change the basic structure of the PSC and have been approved in the overall interest of the energy security of the country. Page 3
These proposals are expected to yield the following benefits: Monetisation of some of the discoveries, which are struck because of expiry of timelines Additional discoveries in the appraisal period Improvement in investment climate because of resolution of disputes between the contractors and the government Enhancement of production of oil and gas from these blocks Preparation of a more robust FDP The revised gross crude oil under-recoveries post diesel price deregulation is as follows:- Exhibit 1: Current under-recoveries scenario Year FY13 FY14 FY15E FY16E Products ( Crore) HSD 92,061.0 62,837.0 10,842.4 0.0 LPG 39,558.0 46,457.0 53,057.2 56,547.2 SKO 29,410.0 30,575.0 28,645.4 26,779.3 Total 161029.0 139869.0 92545.0 83326.5 Sharing Macro (%) Upstream 37.3% 47.9% 65.2% 72.0% Downstream 0.6% 1.5% 1.0% 0.5% Government 62.1% 50.6% 33.8% 27.5% Total 100.0 100.0 100.0 100.0 Sharing ( Crore) Upstream 60,000.0 67,022.4 60,365.5 59,955.3 Downstream 1,029.8 2,074.6 929.7 416.6 Government 100,000.0 70,772.0 31,249.9 22,954.5 Total 161029.8 139869.0 92545.0 83326.5 Sharing among various stakeholders ( Crore) ONGC 49,420.7 56,384.3 51,067.0 51,111.0 OIL India 7,892.2 8,736.8 7,898.5 7,844.3 GAIL 2,687.2 1,901.3 1,400.0 1,000.0 IOC 548.5 1,082.6 511.6 217.5 HPCL 232.2 480.3 213.6 96.5 Government 100,000.0 70,772.0 31,249.9 22,954.5 Page 4
Exhibit 2: ONGC Valuation Valuation based on P / BV multiple Adjusted Book Value for FY17E ( Crore) 237021.3 Adjusted number of shares (Crore) 855.6 Adjusted Book Value per share ( ) 277.0 Multiple 1.6 Value of core business ( per share) 444.6 Add: Listed investments (25% discount to CMP) ( per share) 10 Fair Value per share ( ) 455 Valuation based on P / E multiple Profit after tax for FY17E ( Crore) 45248.6 Less: Other Income adjusted for tax ( Crore) 4465.7 Adjusted profit after tax for FY17E ( Crore) 40782.9 Number of shares (Crore) 855.6 Adjusted EPS for FY17E ( ) 47.7 Multiple 12.0 Fair value per share without investments ( ) 572.0 Add: Value of Investments ( per share) Listed investments (25% discount to CMP) 10 Other Investments 1.5 Fair value per share ( ) 584 Weighted Target Price ( per share) 519 Exhibit 3: Oil India Valuation Valuation based on P / BV multiple Adjusted Book Value for FY17E ( Crore) 28873.0 Adjusted number of shares (Crore) 60.1 Adjusted Book Value per share ( ) 480.3 Multiple 1.3 Value of core business ( per share) 624.4 Add: Unlisted investments ( per share) 114 Fair Value per share ( ) 738 Valuation based on P / E multiple Profit after tax for FY17E ( Crore) 5367.1 Less: Other Income adjusted for tax ( Crore) 1136.3 Adjusted profit after tax for FY17E ( Crore) 4230.8 Number of shares (Crore) 60.1 Adjusted EPS for FY17 ( ) 70.4 Multiple 10.0 Fair value per share without investments ( ) 703.8 Add: Value of Investments ( per share) Other Investments 114 Fair value per share ( ) 818 Weighted Target Price ( per share) 778 Page 5
Exhibit 4: Gail Valuation Segments Enterprise Value ( Crore) per share % of SOTP Method Transmission Business Natural Gas Transmission 19733.1 155.6 28.1 DCF LPG Transmission 2994.3 23.6 4.3 DCF Value of transmission business 22727.4 179 32.3 Other Businesses Natural Gas Trading 11971.2 94.4 17.0 7x FY16E EV/EBITDA Petrochemicals 15329.9 120.9 21.8 6x FY16E EV/EBITDA LPG and Liquid Hydrocarbons 12729.0 100.3 18.1 6x FY16E EV/EBITDA Value of Other Businesses 40030.0 316 56.9 Investments Quoted 8121.2 64.0 11.5 25% discount to CMP Unquoted 3047.3 24.0 4.3 Value of Investments 11168.5 88 15.9 Firm Value 73925.9 583 105.1 Less: Net Debt -3602.3-28.4-5.1 Equity Value 70323.6 554 100.0 Exhibit 5: Indian Oil Valuation Valuation based on Price / BV Multiple Adjusted Book Value for FY16E ( Crore) 72278.6 Adjusted number of shares (Crore) 239.9 Adjusted Book Value per share ( ) 301.3 Add: Listed investments (25% discount) 129.4 Book Value of core business ( per share) 430.8 Multiple 1.1 Fair Value per share ( ) 474 Valuation based on P / E multiple Profit after tax for FY16E ( Crore) 8011.0 Less: Other Income adjusted for tax ( Crore) 2054.7 Adjusted profit after tax for FY16E ( Crore) 5956.3 Number of shares (Crore) 239.9 Adjusted EPS for FY15E ( ) 24.8 Multiple 12.0 Fair value per share without investments ( ) 298 Add: Value of Investments ( per share) Listed investments (25% discount) 129.4 Other Investments 3.6 Fair value per share ( ) 431 Weighted Target Price ( per share) 452 Page 6
Exhibit 6: HPCL valuation Valuation based on Price / BV Multiple Adjusted Book Value for FY16E ( Crore) 16288.5 Adjusted number of shares (Crore) 33.9 Adjusted Book Value per share ( ) 480.5 Add: Listed investments (25% discount) 64.6 Book Value of core business ( per share) 545.0 Multiple 1.0 Fair Value per share ( ) 545 Valuation based on P / E multiple Profit after tax for FY16E ( Crore) 2059.5 Less: Other Income adjusted for tax ( Crore) 490.5 Adjusted profit after tax for FY15E ( Crore) 1568.9 Number of shares (Crore) 33.9 Adjusted EPS for FY15E ( ) 46.3 Multiple 12.0 Fair value per share without investments ( ) 555 Add: Value of Investments ( per share) Listed investments (25% discount) 64.6 HPCL - Mittal Energy 76.0 Other Investments 10.9 Fair value per share ( ) 707 Weighted Target Price ( per share) 626 Exhibit 7: Gujarat Gas valuation Pariculars WACC 12.0% Present Value of Cash Flows till FY19E 1439.0 Terminal Growth Rate 3% Terminal Value 4786.9 Present Value of Terminal Cash Flows 3223.6 Total Present Value of the Firm 4662.5 Less: Net Debt (FY14E) -394.9 Total Present Value of Equity 5057.5 Number of Outstanding shares (In Crore) 12.8 DCF - Target Price ( per share) 395 Exhibit 8: Indraprastha Gas valuation Particulars Amount WACC 12.0% Present Value of Cash Flows till FY19E 1800.7 Terminal Growth Rate 3.0% Terminal Value 6472.4 Present Value of Terminal Cash Flows 3680.8 Total Present Value of the Firm 5481.6 Less: Net Debt (FY14E) 23.5 Total Present Value of Equity 5458.0 Number of Outstanding shares (In Crore) 14.0 DCF ( per share) 390 Page 7
ONGC: Financial summary Profit and loss statement ( Crore) Revenue 174,466.6 178,589.6 196,377.3 211,404.0 Growth (%) 7.3 3.2 9.8 7.5 (Inc.)/Dec. in stock trade -719.3-203.1 0.0 0.0 Raw material Costs 68276.8 67342.5 68101.1 68597.5 Employee Costs 2530.9 3673.4 3803.5 3920.1 Statutory Levies 26189.3 27418.4 29822.8 30972.0 Other Expenditure 19974.4 22140.7 23206.6 23206.6 Op. Expenditure 116252.1 120371.9 124934.0 126696.2 EBITDA 58,214.5 58,217.7 71,443.3 84,707.8 Growth (%) 6.0 0.0 22.7 18.6 Depreciation 25084.5 23133.1 22907.5 24091.8 EBIT 33129.9 35084.6 48535.8 60616.0 Interest 658.7 755.9 805.3 670.3 Other Income 6942.2 7967.8 8461.9 7273.3 PBT 39413.4 42296.5 56192.4 67218.9 Growth (%) 7.3 7.3 32.9 19.6 Tax 12760.4 13990.6 18420.5 21970.4 Reported PAT 26,653.0 28,305.9 37,771.8 45,248.6 Growth (%) 11.1 6.2 33.4 19.8 EPS 31.0 32.9 43.8 52.5 Cash flow statement ( Crore) Profit after Tax 26,653.0 28,305.9 37,771.8 45,248.6 Less: Dividend Paid 9,489.1 11,736.6 12,735.4 13,734.3 Add: Depreciation 25,084.5 23,133.1 22,907.5 24,091.8 Add: Others 0.0 0.0 0.0 0.0 Cash Profit 44,748.6 40,904.4 49,145.9 56,808.1 Increase/(Decrease) in CL 10,340.5-15,674.9 5,911.5 5,261.6 (Increase)/Decrease in CA 10,062.5 5,813.4 420.2 886.4 CF from Operating Activities 65151.6 31042.9 55477.6 62956.1 Purchase of Fixed Assets 22,163.6 44,543.1 52,081.4 43,724.1 (Inc)/Dec in Investments -1,179.1 0.0 0.0 0.0 Others 1.0 1.0 2.0 3.0 CF from Investing Activities -23,342.7-44,543.1-52,081.4-43,724.1 Inc/(Dec) in Loan Funds 3,904.6 50.0-1,050.0-1,050.0 Inc/(Dec) in Sh. Cap. & Res. -821.5-859.8-1,165.4-1,228.0 Others 1.0 1.0 2.0 3.0 CF from financing activities 3,083.1-809.8-2,215.4-2,278.0 Change in cash Eq. 44,892.1-14,310.0 1,180.8 16,954.0 Op. Cash and cash Eq. 19,614.2 64,506.3 50,196.3 51,377.1 Cl. Cash and cash Eq. 64,506.3 50,196.3 51,377.1 68,331.0 Balance sheet ( Crore) Source of Funds Equity Capital 4,277.8 4,277.8 4,277.8 4,277.8 Reserves & Surplus 164,592.7 180,302.2 204,173.2 234,459.5 Shareholder's Fund 168,870.4 184,579.9 208,450.9 238,737.2 Loan Funds 10,017.6 8,867.6 6,617.6 4,367.6 Abandon cost liability 23,450.4 24,650.4 25,850.4 27,050.4 Deferred Tax Liability 18,040.2 19,242.2 20,444.2 21,646.2 Minority Interest 2,051.6 2,051.6 2,051.6 2,051.6 Source of Funds 222,430.3 239,391.8 263,414.8 293,853.0 Application of Funds Net Block 44,584.1 56,335.6 61,133.9 64,606.6 Capital WIP 21,180.3 15,658.3 23,491.3 21,524.3 Producing Properties 85,100.0 97,187.6 110,599.3 125,553.2 Pre-Producing Properties 19,245.1 22,338.0 25,468.9 28,641.6 Total Fixed Assets 170,109.5 191,519.5 220,693.4 240,325.7 Investments 3,307.2 3,307.2 3,307.2 3,307.2 Inventories 13,657.0 13,999.7 15,132.1 16,073.7 Debtor 16,478.7 13,147.5 14,419.9 15,417.0 Cash 64,506.3 50,196.3 51,377.1 68,331.0 Loan & Advance, Other CA 18,481.5 15,656.5 12,831.5 10,006.5 Total Current assets 113,123.4 93,000.0 93,760.6 109,828.2 Current Liabilities 38,305.7 39,750.2 43,764.3 47,143.1 Provisions 26,600.2 9,480.8 11,378.3 13,261.1 Total CL and Provisions 64,905.9 49,231.0 55,142.6 60,404.2 Net Working Capital 48,217.5 43,769.0 38,618.1 49,424.0 Miscellaneous expense 796.0 796.0 796.0 796.0 Application of Funds 222,430.3 239,391.8 263,414.8 293,853.0 Key ratios Per share data ( ) Book Value 197.4 215.7 243.6 279.0 Cash per share 75.4 58.7 60.1 79.9 EPS 31.0 32.9 43.8 52.5 Cash EPS 60.3 59.9 70.6 80.7 DPS 9.5 11.8 12.8 13.8 Profitability & Operating Ratios EBITDA Margin (%) 33.4 32.6 36.4 40.1 PAT Margin (%) 15.3 15.8 19.2 21.4 Fixed Asset Turnover (x) 1.0 0.9 0.9 0.9 Inventory Turnover (Days) 59.4 58.6 54.6 51.1 Debtor (Days) 71.7 55.1 52.0 49.0 Current Liabilities (Days) 166.7 166.5 157.8 149.8 Return Ratios (%) RoE 15.8 15.3 18.1 19.0 RoCE 18.6 18.2 22.7 25.0 RoIC 29.2 24.6 29.8 34.8 Valuation Ratios (x) PE 13.2 12.4 9.3 7.8 Price to Book Value 2.1 1.9 1.7 1.5 EV/EBITDA 5.1 5.3 4.3 3.4 EV/Sales 1.7 1.7 1.5 1.3 Leverage & Solvency Ratios Debt to equity (x) 0.1 0.0 0.0 0.0 Interest Coverage (x) 50.3 46.4 60.3 90.4 Debt to EBITDA (x) 0.2 0.2 0.1 0.1 Current Ratio 1.7 1.9 1.7 1.8 Quick ratio 1.5 1.6 1.4 1.6 Page 8
Oil India: Financial summary Profit and loss statement Revenue 9,612.7 10,997.2 12,495.6 15,025.8 Growth (%) -3.4 14.4 13.6 20.2 (Inc.)/Dec. in stock trade 7.9 9.4 0.0 0.0 Raw material Costs 0.0 0.0 0.0 0.0 Employee Costs 1473.2 1480.8 1555.1 1658.2 Statutory Levies 2878.9 3126.7 3476.8 4267.2 Other Expenditure 1219.0 1047.7 1083.4 1157.4 Op. Expenditure 5578.9 5664.7 6115.3 7082.8 EBITDA 4,033.8 5,332.5 6,380.3 7,943.0 Growth (%) -13.6 32.2 19.6 24.5 Depreciation 1177.0 847.9 943.5 1289.4 EBIT 2856.8 4484.6 5436.9 6653.6 Interest 68.8 342.5 342.4 338.0 Other Income 1622.5 1238.7 1589.0 1600.4 PBT 4410.4 5380.7 6683.5 7916.0 Growth (%) -16.5 22.0 24.2 18.4 Tax 1429.1 1752.9 2152.1 2549.0 Reported PAT 2,981.3 3,627.8 4,531.4 5,367.1 Growth (%) -16.9 21.7 24.9 18.4 EPS 49.6 60.4 75.4 89.3 Cash flow statement Profit after Tax 2,981.3 3,627.8 4,531.4 5,367.1 Less: Dividend Paid 1,512.1 1,617.6 1,758.3 1,758.3 Add: Depreciation 1,177.0 847.9 943.5 1,289.4 Add: Others 95.6 100.0 100.0 100.0 Cash Profit 2,741.8 2,958.2 3,816.6 4,999.2 Increase/(Decrease) in CL -411.7-44.3 448.2 525.2 (Increase)/Decrease in CA 108.7-222.7-225.8-381.3 CF from Operating Activities 2438.8 2691.1 4039.0 5143.1 Purchase of Fixed Assets 1,241.0 1,854.7 1,911.9 2,231.8 (Inc)/Dec in Investments -9,599.5 2,670.8 0.0 0.0 Others 1.0 1.0 2.0 3.0 CF from Investing Activities -10,840.6 816.1-1,911.9-2,231.8 Inc/(Dec) in Loan Funds 8,723.8 0.0 0.0-250.0 Inc/(Dec) in Sh. Cap. & Res. 29.5-29.5 0.0 1.0 Others 0.0 0.0 1.0 2.0 CF from financing activities 8,753.3-29.5 0.0-249.0 Change in cash Eq. 351.6 3,477.7 2,127.1 2,662.3 Op. Cash and cash Eq. 12,048.7 12,400.3 15,878.0 18,005.1 Cl. Cash and cash Eq. 12,400.3 15,878.0 18,005.1 20,667.4 Balance sheet Source of Funds Equity Capital 601.1 601.1 601.1 601.1 Preference capital 0.0 0.0 0.0 0.0 Reserves & Surplus 20,108.3 22,089.0 24,862.1 28,471.9 Shareholder's Fund 20,709.4 22,690.1 25,463.3 29,073.0 Loan Funds 9,782.7 9,782.7 9,782.7 9,532.7 Deferred Tax Liability 1,314.2 1,414.2 1,514.2 1,614.2 Minority Interest 0.0 0.0 1.0 2.0 Source of Funds 32,019.0 34,099.7 36,972.9 40,433.6 Application of Funds Net Block 436.8 423.7 387.4 328.1 Capital WIP 753.7 786.4 819.1 851.8 Producing Properties 4,383.8 5,082.0 5,765.0 6,446.0 Pre-Producing Properties 1,337.0 1,626.0 1,915.0 2,203.0 Total Fixed Assets 6,911.3 7,918.1 8,886.5 9,828.9 Investments 11,456.6 8,785.9 8,785.9 8,785.9 Inventories 968.7 1,114.8 1,266.7 1,523.2 Debtor 465.7 542.3 616.2 741.0 Cash 12,400.3 15,878.0 18,005.1 20,667.4 Loan & Advance, Other CA 2,883.9 2,883.9 2,883.9 2,883.9 Total Current assets 16,718.6 20,419.0 22,771.9 25,815.5 Current Liabilities 1,520.6 1,506.5 1,711.7 2,058.3 Provisions 1,546.9 1,516.7 1,759.7 1,938.3 Total CL and Provisions 3,067.5 3,023.2 3,471.4 3,996.6 Net Working Capital 13,651.1 17,395.8 19,300.5 21,818.9 Miscellaneous expense 0.0 0.0 0.0 0.0 Application of Funds 32,019.0 34,099.7 36,972.9 40,433.7 Key ratios Per share data ( ) Book Value 344.5 377.5 423.6 483.6 Cash per share 206.3 264.1 299.5 343.8 EPS 49.6 60.4 75.4 89.3 Cash EPS 69.2 74.5 91.1 110.7 DPS 21.5 23.0 25.0 25.0 Profitability & Operating Ratios EBITDA Margin (%) 42.0 48.5 51.1 52.9 PAT Margin (%) 31.0 33.0 36.3 35.7 Fixed Asset Turnover (x) 1.4 1.4 1.4 1.5 Inventory Turnover (Days) 37.0 37.0 37.0 37.0 Debtor (Days) 18.0 18.0 18.0 18.0 Current Liabilities (Days) 50.0 50.0 50.0 50.0 Return Ratios (%) RoE 14.4 16.0 17.8 18.5 RoCE 9.4 13.8 15.4 17.2 RoIC 16.0 27.4 31.9 37.5 Valuation Ratios (x) PE 12.2 10.0 8.0 6.8 Price to Book Value 1.8 1.6 1.4 1.2 EV/EBITDA 8.4 5.7 4.4 3.2 EV/Sales 3.5 2.7 2.2 1.7 Leverage & Solvency Ratios Debt to equity (x) 0.5 0.4 0.4 0.3 Interest Coverage (x) 41.5 13.1 15.9 19.7 Debt to EBITDA (x) 2.4 1.8 1.5 1.2 Current Ratio 5.5 6.8 6.6 6.5 Quick ratio 5.1 6.4 6.2 6.1 Page 9
Gail India: Financial summary Profit and loss statement ( crore) Revenue 47,479.8 57,508.0 64,343.9 76,444.7 Growth (%) 17.5 21.1 11.9 18.8 (Inc.) / Dec stock in trade -57.0-626.9-604.1 0.0 Raw material Costs 2968.7 4843.4 4896.2 5945.6 Purchase of trading goods 33396.9 41234.4 48028.3 56078.0 Employee Costs 742.6 847.7 898.4 925.1 Other Expenditure 3893.3 4508.0 4263.6 4652.3 Op. Expenditure 40944.4 50806.7 57482.3 67601.1 EBITDA 6,535.4 6,701.2 6,861.6 8,843.6 Growth (%) 12.4 2.5 2.4 28.9 Depreciation 980.9 1176.2 937.3 1121.2 EBIT 5554.4 5525.1 5924.4 7722.4 Interest 195.0 366.2 319.2 321.9 Other Income 698.4 898.5 667.0 694.7 PBT 6057.8 6402.4 6272.2 8095.2 Growth (%) 13.4 5.7-2.0 29.1 Tax 2035.6 2027.1 2045.0 2671.4 Reported PAT 4,022.2 4,375.3 4,227.2 5,423.8 Growth (%) 10.1 8.8-3.4 28.3 EPS 31.7 34.5 33.3 42.8 Cash flow statement ( crore) Profit after Tax 4,022.2 4,375.3 4,227.2 5,423.8 Less: Dividend Paid 1,420.8 1,543.4 1,591.9 1,621.4 Add: Depreciation 980.9 1,176.2 937.3 1,121.2 Add: Others 531.4 266.3 150.0 150.0 Cash Profit 4,113.8 4,274.4 3,722.6 5,073.7 Increase/(Decrease) in CL -1,014.3 1,316.1 4,182.7 2,747.9 (Increase)/Decrease in CA 882.4-1,212.5-1,162.5-1,577.5 CF from Operating Activities 3981.9 4378.0 6742.8 6244.1 Purchase of Fixed Assets 4,830.9 3,978.4 3,550.2 3,543.0 (Inc)/Dec in Investments -2,027.0-1,821.5-400.0-400.0 Others 0.0 0.0 0.0 1.0 CF from Investing Activities -6,857.9-5,798.9-3,950.2-3,943.0 Inc/(Dec) in Loan Funds 2,793.9 1,385.3-220.0-220.0 Inc/(Dec) in Sh. Cap. & Res. 1.8 12.7 0.0 4.0 Others 0.0 0.0 0.0 1.0 CF from financing activities 2,795.7 1,398.0-220.0-216.0 Change in cash Eq. -80.3-22.9 2,572.6 2,085.1 Op. Cash and cash Eq. 929.3 849.0 826.1 3,398.7 Cl. Cash and cash Eq. 849.0 826.1 3,398.7 5,483.8 Balance sheet Source of Funds Equity Capital 1,268.5 1,268.5 1,268.5 1,268.5 Preference capital 0.0 0.0 0.0 0.0 Reserves & Surplus 22,959.3 25,803.9 28,439.3 32,245.7 Shareholder's Fund 24,227.8 27,072.4 29,707.7 33,514.2 Loan Funds 8,140.8 9,526.1 9,306.1 9,086.1 Deferred Tax Liability 2,300.1 2,566.4 2,716.4 2,866.4 Minority Interest 0.0 0.0 0.0 0.0 Source of Funds 34,668.6 39,164.9 41,730.2 45,466.6 Application of Funds Gross Block 31,149.0 34,056.3 41,556.3 49,056.3 Less: Acc. Depreciation 11,439.3 12,579.7 13,509.8 14,631.0 Net Block 19,709.7 21,476.6 28,046.6 34,425.3 Capital WIP 7,942.5 8,977.8 5,020.8 1,063.8 Total Fixed Assets 27,652.2 30,454.5 33,067.4 35,489.1 Investments 5,575.9 7,397.4 7,797.4 8,197.4 Inventories 1,535.3 2,254.8 2,115.4 2,513.2 Debtor 3,224.5 2,812.0 3,613.8 4,293.5 Cash 849.0 826.1 3,398.7 5,483.8 Loan & Advance, Other CA 5,162.1 6,067.7 6,567.7 7,067.7 Total Current assets 10,771.0 11,960.5 15,695.6 19,358.2 Current Liabilities 7,535.6 8,793.5 9,519.4 11,309.6 Provisions 1,794.9 1,853.0 5,309.8 6,267.5 Total CL and Provisions 9,330.5 10,646.5 14,829.2 17,577.1 Net Working Capital 1,440.5 1,314.0 866.4 1,781.1 Miscellaneous expense 0.0 0.0 0.0 0.0 Application of Funds 34,668.6 39,165.9 41,731.2 45,467.6 Key ratios Per share data ( ) Book Value 191.0 213.4 234.2 264.2 Cash per share 6.7 6.5 26.8 43.2 EPS 31.7 34.5 33.3 42.8 Cash EPS 39.4 43.8 40.7 51.6 DPS 9.6 10.4 10.8 11.0 Profitability & Operating Ratios EBITDA Margin (%) 13.8 11.7 10.7 11.6 PAT Margin (%) 8.5 7.6 6.6 7.1 Fixed Asset Turnover (x) 1.7 1.9 1.9 2.2 Inventory Turnover (Days) 11.8 14.3 12.0 12.0 Debtor (Days) 24.8 17.8 20.5 20.5 Current Liabilities (Days) 57.9 55.8 54.0 54.0 Return Ratios (%) RoE 16.6 16.2 14.2 16.2 RoCE 17.2 15.1 15.2 18.1 RoIC 17.6 15.4 16.6 20.8 Valuation Ratios (x) PE 14.4 13.3 13.7 10.7 Price to Book Value 2.4 2.1 2.0 1.7 EV/EBITDA 10.0 10.0 9.3 7.0 EV/Sales 1.4 1.2 1.0 0.8 Leverage & Solvency Ratios Debt to equity (x) 0.3 0.4 0.3 0.3 Interest Coverage (x) 28.5 15.1 18.6 24.0 Debt to EBITDA (x) 1.2 1.4 1.4 1.0 Current Ratio 1.2 1.1 1.1 1.1 Quick ratio 1.0 0.9 0.9 1.0 Page 10
Indian Oil Corporation: Financial summary Profit and loss statement Revenue 447,096.4 473,396.2 494,999.5 565,306.2 Growth (%) 2.9 5.9 4.6 14.2 (Inc.)/(Dec.) in stock in trade -5220.0-1153.0 6277.4 0.0 Raw material Costs 219744.0 227012.0 240510.9 303526.6 Purchase of Products 188182.2 196237.2 199680.4 209598.2 Employee Costs 7271.3 6619.0 6855.2 7540.7 Other Expenditure 23375.8 28889.0 24052.7 23950.0 Op. Expenditure 433353.2 457604.2 477376.7 544615.6 EBITDA 13,743.2 15,792.1 17,622.8 20,690.6 Growth (%) -26.7 14.9 11.6 17.4 Depreciation 5201.0 5760.1 6240.4 7226.0 EBIT 8542.2 10032.0 11382.4 13464.6 Interest 6409.2 5084.4 4539.1 5168.2 Other Income 3514.8 4978.0 4538.0 3066.7 PBT 5647.8 9925.5 11381.3 11363.1 Growth (%) 50.4 75.7 14.7-0.2 Tax 642.6 2906.4 3337.7 3352.1 Reported PAT 5,005.2 7,019.1 8,043.6 8,011.0 Growth (%) 26.6 40.2 14.6-0.4 EPS 20.6 28.9 33.1 33.0 Cash flow statement Profit after Tax 5,005.2 7,019.1 8,043.6 8,011.0 Less: Dividend Paid 1,761.2 2,471.3 2,556.6 2,698.7 Add: Depreciation 5,201.0 5,760.1 6,240.4 7,226.0 Add: Others 0.0 0.0 0.0 0.0 Cash Profit 8,715.8 10,411.4 12,027.4 12,838.3 Increase/(Decrease) in CL 1,011.0 19,196.9 9,598.6 9,606.5 (Increase)/Decrease in CA -8,625.3-3,468.1 3,563.0-5,172.0 CF from Operating Activities 1101.5 26140.2 25189.0 17272.8 Purchase of Fixed Assets 10,536.2 23,640.5 9,726.4 13,500.0 (Inc)/Dec in Investments -82.8-4,923.0 5,000.0 0.0 Others 0.0 1.0 1.0 2.0 CF from Investing Activities -10,618.9-28,563.5-4,726.4-13,500.0 Inc/(Dec) in Loan Funds 9,546.1 4,250.3-9,000.0-11,000.0 Inc/(Dec) in Sh. Cap. & Res. 3.1 320.0 0.0 0.0 Others 0.0 1.0 1.0 2.0 CF from financing activities 9,549.3 4,570.3-9,000.0-11,000.0 Change in cash Eq. 31.8 2,147.0 11,462.7-7,227.2 Op. Cash and cash Eq. 429.7 461.5 2,608.5 14,071.2 Cl. Cash and cash Eq. 461.5 2,608.5 14,071.2 6,844.0 Balance sheet Source of Funds Equity Capital 2,428.0 2,428.0 2,428.0 2,428.0 Preference capital 0.0 0.0 0.0 0.0 Reserves & Surplus 58,696.4 63,564.1 69,051.1 74,363.4 Shareholder's Fund 61,124.3 65,992.1 71,479.1 76,791.4 Loan Funds 89,760.4 94,010.7 85,010.7 74,010.7 Deferred Tax Liability 5,512.7 5,616.2 5,916.2 6,216.2 Minority Interest 0.0 0.0 0.0 0.0 Source of Funds 156,397.4 165,619.0 162,405.9 157,018.3 Application of Funds Gross Block 104,881.3 112,609.0 138,650.8 148,650.8 Less: Acc. Depreciation 44,206.8 49,660.2 56,174.3 63,400.3 Net Block 60,674.5 62,948.8 82,476.5 85,250.5 Capital WIP 18,273.1 33,879.2 17,837.4 21,337.4 Total Fixed Assets 78,947.6 96,828.0 100,314.0 106,588.0 Investments 18,671.2 23,594.2 18,594.2 18,594.2 Inventories 59,314.4 64,697.4 66,452.0 75,890.4 Debtor 11,254.8 11,023.1 12,205.5 13,939.1 Cash 461.5 2,608.5 14,071.2 6,844.0 Loan & Advance, Other CA 55,345.7 53,662.6 47,162.6 41,162.6 Total Current assets 126,376.4 131,991.6 139,891.2 137,836.1 Current Liabilities 49,582.0 60,016.4 61,027.3 69,695.3 Provisions 18,015.9 26,778.4 35,366.1 36,304.7 Total CL and Provisions 67,597.9 86,794.8 96,393.4 106,000.0 Net Working Capital 58,778.5 45,196.8 43,497.8 31,836.1 Miscellaneous expense 0.0 0.0 0.0 0.0 Application of Funds 156,397.4 165,619.0 162,405.9 157,018.3 Key ratios Per share data ( ) Book Value 251.8 271.8 294.4 316.3 Cash per share 1.9 10.7 58.0 28.2 EPS 20.6 28.9 33.1 33.0 Cash EPS 42.0 52.6 58.8 62.8 DPS 6.2 8.7 9.0 9.5 Profitability & Operating Ratios EBITDA Margin (%) 3.1 3.3 3.6 3.7 PAT Margin (%) 1.1 1.5 1.6 1.4 Fixed Asset Turnover (x) 5.7 4.9 4.9 5.3 Inventory Turnover (Days) 48.4 49.9 49.0 49.0 Debtor (Days) 9.2 8.5 9.0 9.0 Current Liabilities (Days) 40.5 46.3 45.0 45.0 Return Ratios (%) RoE 8.2 10.6 11.3 10.4 RoCE 5.7 6.3 7.3 8.9 RoIC 6.4 7.1 8.8 10.1 Valuation Ratios (x) PE 16.7 11.9 10.4 10.5 Price to Book Value 1.4 1.3 1.2 1.1 EV/EBITDA 6.1 5.3 4.8 4.0 EV/Sales 0.4 0.4 0.3 0.3 Leverage & Solvency Ratios Debt to equity (x) 1.5 1.4 1.2 1.0 Interest Coverage (x) 1.3 2.0 2.5 2.6 Debt to EBITDA (x) 6.5 6.0 4.8 3.6 Current Ratio 1.9 1.5 1.5 1.3 Quick ratio 1.0 0.8 0.8 0.6 Page 11
HPCL: Financial summary Profit and loss statement Revenue 206,731.3 223,271.3 249,388.4 264,798.0 Growth (%) 15.8 8.0 11.7 6.2 (Inc.)/(Dec.) in stock in trade 809.5-574.4 913.0 0.0 Raw material Costs 63182.6 61962.5 66177.6 71703.4 Purchase of Products 128178.6 145138.0 166073.9 174253.5 Employee Costs 2525.6 2030.3 2314.4 2400.0 Other Expenditure 7890.7 9380.9 9074.7 10300.0 Op. Expenditure 202586.9 217937.2 244553.7 258656.9 EBITDA 4,144.4 5,334.1 4,834.7 6,141.0 Growth (%) 9.6 28.7-9.4 27.0 Depreciation 1931.5 2188.4 2503.2 2732.2 EBIT 2212.9 3145.7 2331.5 3408.8 Interest 1837.7 1504.6 963.0 1065.0 Other Income 1099.5 974.4 780.8 730.0 PBT 1474.6 2615.5 2149.4 3073.8 Growth (%) 20.9 77.4-17.8 43.0 Tax 569.9 881.7 709.2 1014.4 Reported PAT 904.8 1,733.8 1,440.2 2,059.5 Growth (%) -0.7 91.6-16.9 43.0 EPS 26.7 51.1 42.5 60.7 Cash flow statement Profit after Tax 904.8 1,733.8 1,440.2 2,059.5 Less: Dividend Paid 336.8 614.1 595.0 595.0 Add: Depreciation 1,931.5 2,188.4 2,503.2 2,732.2 Add: Others 513.1 310.1 100.0 100.0 Cash Profit 3,012.6 3,618.2 3,448.5 4,296.7 Increase/(Decrease) in CL -679.7 602.4 7,685.7 2,130.2 (Increase)/Decrease in CA -2,076.4-463.1 309.8 1,465.0 CF from Operating Activities 256.5 3757.6 11443.9 7892.0 Purchase of Fixed Assets 4,358.8 4,964.7 2,855.1 3,880.0 (Inc)/Dec in Investments -256.4-232.9 0.0 0.0 Others 0.0 0.0 0.0 0.0 CF from Investing Activities -4,615.2-5,197.6-2,855.1-3,880.0 Inc/(Dec) in Loan Funds 4,697.7 137.3-6,957.7-3,500.0 Inc/(Dec) in Sh. Cap. & Res. 35.9 165.9 0.0 0.0 Others 0.0 0.0 0.0 0.0 CF from financing activities 4,733.6 303.2-6,957.7-3,500.0 Change in cash Eq. 375.0-1,136.8 1,631.1 512.0 Op. Cash and cash Eq. 882.6 1,257.5 120.7 1,751.8 Cl. Cash and cash Eq. 1,257.5 120.7 1,751.8 2,263.8 Balance sheet Source of Funds Equity Capital 339.0 339.0 339.0 339.0 Preference capital 0.0 0.0 0.0 0.0 Reserves & Surplus 13,387.5 14,673.2 15,518.4 16,982.9 Shareholder's Fund 13,726.5 15,012.2 15,857.4 17,321.9 Loan Funds 39,000.2 39,137.5 32,179.8 28,679.8 Deferred Tax Liability 3,598.4 3,908.4 4,008.4 4,108.4 Minority Interest 0.0 0.0 0.0 0.0 Source of Funds 56,325.1 58,058.1 52,045.6 50,110.1 Application of Funds Gross Block 37,006.0 42,466.6 45,316.6 49,166.6 Less: Acc. Depreciation 14,543.6 16,640.6 19,138.7 21,840.9 Net Block 22,462.4 25,826.0 26,177.9 27,325.7 Capital WIP 5,172.9 4,585.6 4,585.6 4,585.6 Total Fixed Assets 27,635.3 30,411.5 30,763.5 31,911.2 Investments 10,626.9 10,859.8 10,859.8 10,859.8 Inventories 16,438.7 18,775.4 19,131.2 20,313.3 Debtor 4,935.0 5,466.0 5,124.4 5,078.3 Cash 1,257.5 120.7 1,751.8 2,263.8 Loan & Advance, Other CA 14,348.9 11,944.4 11,620.4 9,019.3 Total Current assets 36,980.2 36,306.4 37,627.8 36,674.7 Current Liabilities 16,617.8 17,190.1 24,597.2 26,117.1 Provisions 2,299.5 2,329.6 2,608.2 3,218.6 Total CL and Provisions 18,917.3 19,519.8 27,205.5 29,335.7 Net Working Capital 18,062.9 16,786.7 10,422.3 7,339.0 Miscellaneous expense 0.0 0.0 0.0 0.0 Application of Funds 56,325.1 58,058.1 52,045.6 50,110.1 Key ratios Per share data ( ) Book Value 404.9 442.8 467.8 511.0 Cash per share 37.1 3.6 51.7 66.8 EPS 26.7 51.1 42.5 60.7 Cash EPS 83.7 115.7 116.3 141.3 DPS 8.5 15.0 15.0 15.0 Profitability & Operating Ratios EBITDA Margin (%) 2.0 2.4 1.9 2.3 PAT Margin (%) 0.4 0.8 0.6 0.8 Fixed Asset Turnover (x) 7.5 7.3 8.1 8.3 Inventory Turnover (Days) 29.0 30.7 28.0 28.0 Debtor (Days) 8.7 8.9 7.5 7.0 Current Liabilities (Days) 29.3 28.1 36.0 36.0 Return Ratios (%) RoE 6.6 11.5 9.1 11.9 RoCE 4.2 5.8 4.9 7.4 RoIC 4.8 6.3 5.4 8.2 Valuation Ratios (x) PE 17.6 9.2 10.0 7.0 Price to Book Value 1.2 1.1 0.9 0.8 EV/EBITDA 13.0 10.3 9.3 6.6 EV/Sales 0.3 0.2 0.2 0.2 Leverage & Solvency Ratios Debt to equity (x) 2.8 2.6 2.0 1.7 Interest Coverage (x) 1.2 2.1 2.4 3.2 Debt to EBITDA (x) 9.4 7.3 6.7 4.7 Current Ratio 2.0 1.9 1.4 1.3 Quick ratio 1.1 0.9 0.7 0.6 Page 12
Gujarat Gas: Financial summary Profit and loss statement (Year-end March) CY12 FY14 FY15E FY16E Revenue 3,096.0 3,903.4 2,815.3 3,170.8 Growth (%) 0.3 0.3-0.3 0.1 Raw material Costs 2483.6 3019.0 2066.5 2367.0 Employee Costs 64.0 79.3 59.6 66.0 Other Expenditure 140.2 181.8 131.2 147.8 Op. Expenditure 2687.8 3280.1 2257.3 2580.8 EBITDA 408.3 623.2 558.0 589.9 Growth (%) 2.8 52.7-10.5 5.7 Depreciation 65.8 96.9 61.9 62.4 EBIT 342.4 526.4 496.2 527.6 Interest 0.2 0.5 0.1 0.0 Other Income 67.2 88.3 77.0 62.5 PBT 409.4 614.2 573.1 590.0 Growth (%) 4.2 50.0-6.7 3.0 Tax 120.9 194.0 183.7 191.8 Reported PAT 288.5 420.1 389.4 398.3 Growth (%) 5.0 45.6-7.3 2.3 Adjustments 0.0 0.0 0.0 0.0 Adj. Net Profit 288.5 420.1 389.4 398.3 EPS 22.3 32.6 30.3 30.9 Cash flow statement (Year-end March) CY12 FY14 FY15E FY16E Profit after Tax 288.5 420.1 389.4 398.3 Less: Dividend Paid 104.7 135.2 195.2 210.3 Add: Depreciation 65.8 96.9 61.9 62.4 Add: Others 15.5 28.9 1.4 1.7 Cash Profit 265.2 410.6 257.5 252.1 Increase/(Decrease) in CL -211.1-27.3-21.1 24.8 (Increase)/Decrease in CA 2.5 9.7 28.6-26.6 CF from Operating Activities 56.7 393.0 265.0 250.3 Purchase of Fixed Assets 134.5 155.2 99.5 95.3 (Inc)/Dec in Investments 114.7-293.3-121.2-200.0 Others 0.0 0.0 0.0 0.0 CF from Investing Activities -19.9-448.5-220.7-295.3 Inc/(Dec) in Loan Funds 0.0 0.0 0.0 1.0 Inc/(Dec) in Sh. Cap. & Res. 0.0 0.0 0.0 0.0 Others -9.0 36.6 29.3 32.1 CF from financing activities -9.0 36.6 29.3 32.1 Change in cash Eq. 27.8-18.9 73.6-13.0 Op. Cash and cash Eq. 14.2 42.0 23.1 96.6 Cl. Cash and cash Eq. 42.0 23.1 96.6 83.7 Balance sheet (Year-end March) CY12 FY14 FY15E FY16E Source of Funds Equity Capital 25.7 25.7 25.7 25.7 Preference capital 0.0 0.0 0.0 0.0 Reserves & Surplus 939.8 1,223.2 1,416.0 1,602.3 Shareholder's Fund 965.5 1,248.9 1,441.6 1,627.9 Loan Funds 0.0 0.0 0.0 0.0 Deferred Tax Liability 87.7 115.1 115.1 115.1 Minority Interest 9.2 10.7 12.1 13.8 Source of Funds 1,331.2 1,681.5 1,906.4 2,128.2 Application of Funds Gross Block 1,290.6 1,449.6 1,574.6 1,699.6 Less: Acc. Depreciation 502.0 583.7 646.1 713.1 Net Block 788.6 866.0 928.6 986.5 Capital WIP 112.8 93.8 68.8 43.8 Total Fixed Assets 901.4 959.7 997.4 1,030.3 Investments 386.5 679.8 801.0 1,001.0 Inventories 24.3 27.7 19.3 21.7 Debtor 183.5 176.9 158.9 179.0 Cash 42.0 23.1 96.6 83.7 Loan & Advance, Other CA 42.3 35.8 33.6 37.7 Total Current assets 292.1 263.5 308.4 322.1 Current Liabilities 240.3 215.8 192.8 217.2 Provisions 8.5 5.8 7.6 8.0 Total CL and Provisions 248.8 221.5 200.4 225.2 Net Working Capital 43.3 42.0 108.0 96.9 Miscellaneous expense 0.0 0.0 0.0 0.0 Application of Funds 1,331.2 1,681.5 1,906.4 2,128.2 Key ratios (Year-end March) CY12 FY14 FY15E FY16E Per share data ( ) Book Value 75.3 97.4 112.4 126.9 Cash per share 33.3 54.7 69.9 84.5 EPS 22.3 32.6 30.3 30.9 Cash EPS 27.6 40.3 35.2 35.9 DPS 7.0 9.0 13.0 14.0 Profitability & Operating Ratios EBITDA Margin (%) 13.2 16.0 19.8 18.6 PAT Margin (%) 9.3 10.8 13.8 12.6 Fixed Asset Turnover (x) 3.4 4.1 2.8 3.1 Inventory Turnover (Days) 2.9 2.6 2.5 2.5 Debtor (Days) 21.6 16.5 20.6 20.6 Current Liabilities (Days) 28.3 20.2 25.0 25.0 Return Ratios (%) RoE 29.9 33.6 27.0 24.5 RoCE 35.5 42.1 34.4 32.4 RoIC 63.7 96.2 91.0 96.9 Valuation Ratios (x) PE 22.7 15.5 16.7 16.4 Price to Book Value 6.7 5.2 4.5 4.0 EV/EBITDA 15.8 10.4 11.5 10.9 EV/Sales 2.1 1.7 2.3 2.0 Leverage & Solvency Ratios Debt to equity (x) 0.0 0.0 0.0 0.0 Interest Coverage (x) 2,140.2 1,012.3 6,202.2 0.0 Debt to EBITDA (x) 0.0 0.0 0.0 0.0 Current Ratio 1.2 1.2 1.5 1.4 Quick ratio 1.1 1.1 1.4 1.3 Page 13
Indraprastha Gas: Financial summary Profit and loss statement ( Crore) Revenue 3,367.7 3,922.2 4,024.6 4,841.2 Growth (%) 33.7 16.5 2.6 20.3 Raw material Costs 2197.0 2681.3 2672.3 3416.2 Employee Costs 56.7 59.6 79.3 96.8 Other Expenditure 355.1 399.0 433.6 493.8 Op. Expenditure 2608.9 3139.8 3185.2 4006.9 EBITDA 758.8 782.4 839.5 834.3 Growth (%) 19.3 3.1 7.3-0.6 Depreciation 186.6 219.5 154.8 169.6 EBIT 572.2 562.9 684.7 664.7 Interest 56.2 43.9 32.4 13.5 Other Income 12.2 21.1 21.8 33.2 PBT 528.2 540.0 674.2 684.4 Growth (%) 17.1 2.2 24.8 1.5 Tax 174.1 179.5 222.4 225.8 Reported PAT 354.1 360.5 451.7 458.5 Growth (%) 15.3 1.8 25.3 1.5 Adjustments 0.0 0.0 0.0 0.0 Adj. Net Profit 354.1 360.5 451.7 458.5 EPS 25.3 25.7 32.3 32.8 Cash flow statement ( Crore) Profit after Tax 354.1 360.5 451.7 458.5 Less: Dividend Paid 90.1 90.1 90.1 106.5 Add: Depreciation 186.6 219.5 154.8 169.6 Add: Others 21.6 11.9 15.0 15.0 Cash Profit 472.3 501.9 531.4 536.7 Increase/(Decrease) in CL 5.3-93.7 198.9 97.0 (Increase)/Decrease in CA -52.4-35.7-39.1-70.0 CF from Operating Activities 425.2 372.5 691.2 563.7 Purchase of Fixed Assets 370.5 240.5 250.2 350.0 (Inc)/Dec in Investments -44.2 25.2 19.2-50.0 Others 0.0 0.0 0.0 1.0 CF from Investing Activities -414.7-215.3-231.0-400.0 Inc/(Dec) in Loan Funds 14.3 35.6-160.0-10.0 Inc/(Dec) in Sh. Cap. & Res. 0.0 0.0 0.0 0.0 Others 0.0 0.0 0.0 1.0 CF from financing activities 14.3 35.6-160.0-10.0 Change in cash Eq. 24.8 192.8 300.2 153.7 Op. Cash and cash Eq. 31.9 56.7 249.5 549.7 Cl. Cash and cash Eq. 56.7 249.5 549.7 703.4 Balance sheet Source of Funds Equity Capital 140.0 140.0 140.0 140.0 Preference capital 0.0 0.0 0.0 1.0 Reserves & Surplus 1,352.9 1,623.3 1,984.9 2,337.0 Shareholder's Fund 1,492.9 1,763.3 2,124.9 2,477.0 Loan Funds 349.1 321.2 121.2 71.2 Deferred Tax Liability 84.3 96.3 111.3 126.3 Minority Interest 0.0 0.0 0.0 1.0 Source of Funds 2,173.4 2,491.3 2,707.9 3,065.0 Application of Funds Gross Block 2,718.6 2,973.3 3,253.3 3,573.3 Less: Acc. Depreciation 871.3 1,076.0 1,230.6 1,400.3 Net Block 1,847.3 1,897.2 2,022.6 2,173.0 Capital WIP 291.3 262.3 232.3 262.3 Total Fixed Assets 2,138.6 2,159.6 2,255.0 2,435.3 Investments 142.6 117.4 98.2 148.2 Inventories 39.7 37.1 47.4 57.0 Debtor 178.9 219.6 220.5 265.3 Cash 56.7 249.5 549.7 703.4 Loan & Advance, Other CA 71.5 69.0 96.9 112.5 Total Current assets 346.7 575.2 914.5 1,138.2 Current Liabilities 356.2 260.8 441.1 530.5 Provisions 98.4 100.1 118.8 126.3 Total CL and Provisions 454.6 360.9 559.8 656.8 Net Working Capital -107.9 214.3 354.7 481.4 Miscellaneous expense 0.0 0.0 0.0 1.0 Application of Funds 2,173.3 2,491.2 2,707.9 3,064.9 Key ratios Per share data ( ) Book Value 106.6 126.0 151.8 176.9 Cash per share 14.2 21.3 46.3 60.8 EPS 25.3 25.7 32.3 32.8 Cash EPS 38.6 41.4 43.3 44.9 DPS 5.5 5.5 5.5 6.5 Profitability & Operating Ratios EBITDA Margin (%) 22.5 19.9 20.9 17.2 PAT Margin (%) 10.5 9.2 11.2 9.5 Fixed Asset Turnover (x) 1.6 1.8 1.8 2.0 Inventory Turnover (Days) 4.3 3.5 4.3 4.3 Debtor (Days) 19.4 20.4 20.0 20.0 Current Liabilities (Days) 38.6 24.3 40.0 40.0 Return Ratios (%) RoE 23.7 20.4 21.3 18.5 RoCE 31.1 27.0 30.5 26.1 RoIC 34.8 31.5 42.8 39.2 Valuation Ratios (x) PE 16.7 16.4 13.1 12.9 Price to Book Value 4.0 3.4 2.8 2.4 EV/EBITDA 8.2 7.6 6.5 6.3 EV/Sales 1.8 1.5 1.4 1.1 Leverage & Solvency Ratios Debt to equity (x) 0.2 0.2 0.1 0.0 Interest Coverage (x) 10.2 12.8 21.2 49.3 Debt to EBITDA (x) 0.5 0.4 0.1 0.1 Current Ratio 0.8 1.6 1.6 1.7 Quick ratio 0.7 1.5 1.5 1.6 Page 14
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Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up to +/-10%; Sell: -10% or more; Pankaj Pandey Head Research pankaj.pandey@icicisecurities.com ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai 400 093 research@icicidirect.com ANALYST CERTIFICATION We /I, Mayur Matani, MBA; Utkarsh Tathagath MBA research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our personal views about any and all of the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc. 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