analysis of hpcl
TRANSCRIPT
HPCL- Growth, Scarcity and Global Imbalance of Oil Industry
Group 1
Vijayshri Sharma Prajakta
Tambekar Debanjan Bose
Princy Bhandhari Souvik Dey
Objectives To study the financial analysis of HPCL To analyse the impact of oil crisis on HPCL To understand and explore the strategies
undertaken by HPCL for capital investment over oi crisis.
Current Indian
Scenario
Contributes 15% to India’s GDP Ranked 5th in the category of refining The industry constitutes 7.64% of women
employees Currently HPCL employs 11226 employees Various Govt. initiatives and investment like
CNG,HSSC and HELP are few examples of it. By 2025 it’s assumed that India would
become 3rd largest oil consumer.
Global Imbalance
of Oil Industry
Saudi Arabia has cut production by 0.5 million barrels
Russia has cut by 0.1 million barrels Iran, Sudan, Libya have been granted by OPEC
to increase production. US Shale Production will contribute more to
supply.
Price Fluctuation
s
Decrease in Oil Price
Oil prices have come down significantly in the past 6 months
High- 58 USD/bbl Low- 42 USD/bbl Countries like Saudi Arabia, Russia, Riyadh ,
Qatar and other OPEC countries majorly impacted
More Supply
over Demand
High Level of Oil Inventory Excessive supply in compare to demand
resulting decrease in Price. Iran increasing it’s production. USA with high shale production lowering the
dependency on OPEC. Positive impact on Oil importing countries
like China, India, Japan etc.
Observation
OPEC cutting down production Russia cutting down production by 300,000
barrels a day An effort towards Inventory Normalization OPEC and Non OPEC producers to join in
output cuts since 2001
Financial Analysis of
HPCL
Ratio Analysis from the year 2011-2015 Return on Equity Return on Capital employed Return on Total Assets Fixed Asset Turnover Working Capital Turnover
Graphical Approach
2011-12 2012-13 2013-14 2014-15 2015-16-5
0
5
10
15
20
25
30
35
Ratios
ROE ROCROTA Fixed asset turnoverWorking Capital Turnover
Capital investment worth rs. 31,570-crore
New projects cost of around Rs 31,500 crore
Capacity expansion at the Visakhapatnam
Maintained uninterrupted fuel supplies with net profit 3,000 crore
Cutting down on imports of petrol and diesel
Strategies of HPCL over oil crisis
Overview ROE of HPCL has an increasing trend It is efficient in generating income from new
investment Effective equity financing to run operations ROTA is also in an increasing trend Company’s assets are profitable and has
invested more in capital assets Upward trend in ROCE Generating good returns to the shareholder
• Performance is even in negative economic condition.
• Oil exporting countries benefited from the higher oil prices.
• Oil exporting countries recorded current account surplus.
• HPCL implemented two strategies Central Procurement and Integrated Margin Management.
Conclusion