Oil And Natural Gas Corporation reports 30.8% Net Income decline and 8.0% Revenue decline
28-05-2015 • About Oil And Natural Gas Corporation (
$ONGC) • By InTwits
Oil And Natural Gas Corporation reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Oil And Natural Gas Corporation has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.0%. At the same time it's a lot of higher than industry average of 2.9%.
- CAPEX is quite volatile: 920 in FY2015, 1,890 in FY2014, 550 in FY2013, 1,300 in FY2012, 990 in FY2011
- The company has business model with average profitability: ROIC is at 10.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Oil And Natural Gas Corporation ($ONGC) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,175,251 | 1,463,496 | 1,614,660 | 1,732,450 | 1,593,715 | -8.0% |
| EBITDA | 423,970 | 496,047 | 440,893 | 491,931 | 425,981 | -13.4% |
| Net Income | 224,559 | 281,436 | 242,196 | 265,065 | 183,335 | -30.8% |
Balance Sheet
|
|---|
| Cash | 205,597 | 277,434 | 195,446 | 232,429 | 59,160 | -74.5% |
| Short Term Debt | 27,271 | 107,579 | 118,429 | 174,319 | 63,690 | -63.5% |
| Long Term Debt | 39,771 | 52,086 | 88,427 | 316,809 | 475,755 | 50.2% |
Cash flow
|
|---|
| Capex | 197,042 | 191,431 | 179,609 | 149,385 | 169,060 | 13.2% |
Ratios
|
|---|
| Revenue growth | 15.5% | 24.5% | 10.3% | 7.3% | -8.0% | |
| EBITDA growth | 19.7% | 17.0% | -11.1% | 11.6% | -13.4% | |
| EBITDA Margin | 36.1% | 33.9% | 27.3% | 28.4% | 26.7% | -1.7% |
| Net Income Margin | 19.1% | 19.2% | 15.0% | 15.3% | 11.5% | -3.8% |
| CAPEX, % of revenue | 16.8% | 13.1% | 11.1% | 8.6% | 10.6% | 2.0% |
| ROIC | 24.3% | 25.2% | 18.6% | 15.8% | 10.2% | -5.5% |
| ROE | 20.7% | 22.4% | 16.8% | 16.3% | 10.4% | -5.9% |
| Net Debt/EBITDA | -0.3x | -0.2x | 0.0x | 0.5x | 1.1x | 0.6x |
Revenue and profitability
The company's Revenue decreased on 8.0% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.7 pp from 28.4% to 26.7% in FY2015.
Net Income marign decreased on 3.8 pp from 15.3% to 11.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 10.6% in FY2015. CAPEX/Revenue decreased on 2.5 pp from 13.1% in FY2012 to 10.6% in FY2015. It's average CAPEX/Revenue for the last three years was 10.1%.
Return on investment
The company operates at low ROIC (10.23%) and ROE (10.40%). ROIC decreased on 5.5 pp from 15.8% to 10.2% in FY2015. ROE decreased on 5.9 pp from 16.3% to 10.4% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.1x and Debt / EBITDA is 1.3x. Net Debt / EBITDA surged on 0.6x from 0.5x to 1.1x in FY2015. Debt increased on 9.8% in FY2015 while cash dropped on 74.5% in FY2015.
Valuation
The company's trades at EV/EBITDA 7.7x and P/E 15.3x while industy averages are 10.5x and 26.1x. Oil And Natural Gas Corporation's EV/(EBITDA-CAPEX) is 12.8x with the industry average at 4.7x.
Appendix 1: Peers in Exploration & Production
Below you can find Oil And Natural Gas Corporation benchmarking vs. other companies in Exploration & Production industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aban Offshore ($ABAN) | | -5.5% | 16.1% | 7.2% | 2.7% |
| Cairn India ($CAIRN) | | 15.5% | 48.3% | 7.1% | -21.9% |
| Oil India ($OIL) | -26.6% | 18.5% | 1.1% | -2.8% | |
| Shiv-Vani Oil & Gas Exploration Services ($SHIV-VANI) | 503.4% | 1.5% | -16.5% | -72.5% | |
| |
|---|
| Median (4 companies) | 238.4% | 8.5% | 8.6% | 2.1% | -9.6% |
|---|
| Oil And Natural Gas Corporation ($ONGC) | | 24.5% | 10.3% | 7.3% | -8.0% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cairn India ($CAIRN) | 82.0% | 78.6% | 74.6% | 73.3% | 73.1% |
| Aban Offshore ($ABAN) | 65.6% | 59.7% | 55.4% | 57.0% | 58.9% |
| Oil India ($OIL) | 43.9% | 42.7% | 43.7% | 37.6% | |
| |
|---|
| Median (3 companies) | 56.8% | 53.2% | 50.2% | 57.0% | 66.0% |
|---|
| Oil And Natural Gas Corporation ($ONGC) | 36.1% | 33.9% | 27.3% | 28.4% | 26.7% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aban Offshore ($ABAN) | 16.8% | 20.9% | 25.4% | 36.1% | 22.7% |
| Oil India ($OIL) | 11.4% | 9.4% | 17.9% | 29.4% | |
| Cairn India ($CAIRN) | 25.1% | 25.0% | 9.3% | 15.3% | 38.1% |
| |
|---|
| Median (3 companies) | 14.1% | 22.9% | 17.9% | 29.4% | 30.4% |
|---|
| Oil And Natural Gas Corporation ($ONGC) | 16.8% | 13.1% | 11.1% | 8.6% | 10.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cairn India ($CAIRN) | 17.6% | 16.6% | 22.7% | 21.3% | 10.0% |
| Selan Exploration Technology ($SELAN) | 19.6% | 23.2% | 21.9% | 18.6% | |
| Oil India ($OIL) | 21.1% | 19.8% | 18.3% | 10.5% | |
| Aban Offshore ($ABAN) | 10.7% | 8.6% | 9.2% | 9.4% | 9.1% |
| Shiv-Vani Oil & Gas Exploration Services ($SHIV-VANI) | 13.1% | 11.7% | 8.0% | | |
| |
|---|
| Median (5 companies) | 17.6% | 16.6% | 18.3% | 14.5% | 9.6% |
|---|
| Oil And Natural Gas Corporation ($ONGC) | 24.3% | 25.2% | 18.6% | 15.8% | 10.2% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aban Offshore ($ABAN) | 5.7x | 7.1x | 6.6x | 6.5x | 5.9x |
| Oil India ($OIL) | 0.2x | -0.0x | 0.2x | 2.7x | |
| Cairn India ($CAIRN) | 0.2x | -0.3x | -0.0x | -0.0x | -0.0x |
| Selan Exploration Technology ($SELAN) | 0.8x | -1.7x | -0.2x | -2.2x | |
| |
|---|
| Median (4 companies) | 0.8x | -0.0x | 0.2x | 1.3x | 2.9x |
|---|
| Oil And Natural Gas Corporation ($ONGC) | -0.3x | -0.2x | 0.0x | 0.5x | 1.1x |
