Indian Oil Corporation reports 119% EBITDA growth in 2016 and 4.5 pp EBITDA Margin growth from 2.5% to 7.0%
27-05-2016 • About Indian Oil Corporation (
$IOC) • By InTwits
Indian Oil Corporation reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 7.0% in FY2016, 2.5% in FY2015, 4.3% in FY2014, 3.4% in FY2013, 5.5% in FY2012
- Indian Oil Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.8%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: ₹1,610m in FY2016, ₹920m in FY2015, ₹1,890m in FY2014, ₹550m in FY2013, ₹1,300m in FY2012
- The company has highly profitable business model: ROIC is 13.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 20.9%. Revenue decline was accelerating on average at -12.7 pp per annum in FY2012-FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 4.5 pp from 2.5% to 7.0% in FY2016.
Net Income margin increased on 2.1 pp from 1.1% to 3.2% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 4.4%. The company showed small growth in CAPEX/Revenue of 1.6 pp from 2.8% in FY2013 to 4.4% in FY2016. For the last three years the average CAPEX/Revenue was 3.9%. Indian Oil Corporation invested a big chunk of EBITDA (63.3%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at good ROIC (13.0%) and ROE (15.5%). ROIC increased on 9.1 pp from 3.9% to 13.0% in FY2016. ROE increased on 8.3 pp from 7.2% to 15.5% in FY2016.
Leverage (Debt)
Debt level is 2.4x Net Debt / EBITDA and 2.5x Debt / EBITDA. Net Debt / EBITDA dropped on 3.2x from 5.6x to 2.4x in FY2016. Debt decreased on 5.5% while cash surged on 46.9%.
Indian Oil Corporation has short term refinancing risk: cash is only 5.6% of short term debt.
Financial and operational results
Indian Oil Corporation ($IOC) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,072,314 | 4,607,497 | 4,872,595 | 4,481,443 | 3,544,253 | -20.9% |
| EBITDA | 223,061 | 156,219 | 207,996 | 113,168 | 247,320 | 118.5% |
| Net Income | 42,260 | 44,490 | 70,856 | 49,120 | 112,192 | 128.4% |
Balance Sheet
|
|---|
| Cash | 7,774 | 11,703 | 36,587 | 11,799 | 17,328 | 46.9% |
| Short Term Debt | 617,049 | 648,836 | 590,507 | 280,970 | 309,610 | 10.2% |
| Long Term Debt | 183,104 | 247,875 | 358,652 | 367,959 | 303,671 | -17.5% |
Cash flow
|
|---|
| Capex | 170,184 | 127,995 | 218,243 | 131,973 | 156,602 | 18.7% |
Ratios
|
|---|
| Revenue growth | 31.8% | 13.1% | 5.8% | -8.0% | -20.9% | |
| EBITDA growth | 52.0% | -30.0% | 33.1% | -45.6% | 118.5% | |
|
|---|
| EBITDA Margin | 5.5% | 3.4% | 4.3% | 2.5% | 7.0% | 4.5% |
| Net Income Margin | 1.0% | 1.0% | 1.5% | 1.1% | 3.2% | 2.1% |
| CAPEX, % of revenue | 4.2% | 2.8% | 4.5% | 2.9% | 4.4% | 1.5% |
|
|---|
| ROIC | 12.7% | 6.4% | 8.7% | 3.9% | 13.0% | 9.1% |
| ROE | 7.2% | 7.2% | 10.8% | 7.2% | 15.5% | 8.3% |
| Net Debt/EBITDA | 3.6x | 5.7x | 4.4x | 5.6x | 2.4x | -3.2x |
Peers in Oil Marketing & Distribution
Below you can find Indian Oil Corporation benchmarking vs. other companies in Oil Marketing & Distribution 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sah Petroleums ($SAHPETRO) | - | -13.1% | -3.3% | 0.9% | 3.7% |
| Gulf Oil Corporation ($GULFOILCOR) | - | - | - | - | - |
| |
|---|
| Median (2 companies) | 51.5% | 20.5% | 2.6% | 0.7% | 3.7% |
|---|
| Indian Oil Corporation ($IOC) | - | 13.1% | 5.8% | -8.0% | -20.9% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sah Petroleums ($SAHPETRO) | 5.7% | 3.5% | 3.8% | 3.5% | 6.8% |
| Gulf Oil Corporation ($GULFOILCOR) | - | - | - | - | 5.8% |
| |
|---|
| Median (2 companies) | 4.5% | 3.2% | 3.8% | 3.5% | 6.3% |
|---|
| Indian Oil Corporation ($IOC) | 5.5% | 3.4% | 4.3% | 2.5% | 7.0% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sah Petroleums ($SAHPETRO) | 0.4% | 0.2% | 0.2% | 3.9% | 2.8% |
| Gulf Oil Corporation ($GULFOILCOR) | - | - | - | - | 1.8% |
| |
|---|
| Median (2 companies) | 1.2% | 0.2% | 0.2% | 3.9% | 2.3% |
|---|
| Indian Oil Corporation ($IOC) | 4.2% | 2.8% | 4.5% | 2.9% | 4.4% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sah Petroleums ($SAHPETRO) | 20.0% | 10.0% | 10.9% | 7.5% | 11.8% |
| Gulf Oil Corporation ($GULFOILCOR) | - | - | - | - | 1.0% |
| |
|---|
| Median (2 companies) | 17.7% | 12.5% | 10.9% | 7.5% | 6.4% |
|---|
| Indian Oil Corporation ($IOC) | 12.7% | 6.4% | 8.7% | 3.9% | 13.0% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Gulf Oil Corporation ($GULFOILCOR) | - | - | - | - | 43.4x |
| Sah Petroleums ($SAHPETRO) | -0.5x | -0.8x | -1.0x | 1.9x | 3.5x |
| |
|---|
| Median (2 companies) | 0.9x | 1.1x | -1.0x | 1.9x | 23.5x |
|---|
| Indian Oil Corporation ($IOC) | 3.6x | 5.7x | 4.4x | 5.6x | 2.4x |
