oil & natural gas ltd - q4fy11 result update

8/6/2019 Oil & Natural Gas Ltd - Q4FY11 Result Update

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Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.

Email: [email protected]

NG TERM INVESTMENT CALL

BUY2 June 2011

Company Report | Q4FY11 Result Update

Oil & Natural Gas Corp Ltd. (ONGC) Q4FY11 results are below our

estimates. This is due to the higher subsidy burden during thequarter.

During the quarter Q4FY11, ONGC’s net sales has marginally

increased (4.6% YoY) to INR 153,962 mn while on an annual basis

the same has increased by 9.8% to INR 658,418 mn FY11. The

increase in revenue was due to the higher crude price realisation.

Moreover, volume growth was marginally lower by 3.3% QoQ on

Q4FY11.

EBITDA for the quarter Q4FY11 stood at INR 79723 mn decline of

15.4% YoY, while on annual basis the EBITDA has increased by 9.4%

in FY11 to INR 410,189 mn. EBITDA margin for the quarter Q4FY11

has contracted by 936 bps while on an annual basis it has declined

by 119 bps. Decline in the EBITDA for Q4FY11 was attributed to

higher operating cost. Operating cost during the quarter has

increased 23.6% led by higher operating & manufacturing cost

(increased 30% YoY) and increased employee cost( increased 60%

YoY).

PAT for the quarter Q4FY11 has declined 26.1% YoY to INR 27,909

mn while for FY11 PAT has increased by 12.9% YoY to INR 189,240

mn. PAT margin for Q4FY11 has contracted 621 bps YoY to 16.7%

while it has marginally increased (26 bps) in FY11 to 26.4%.

Degrowth in PAT for the quarter was due to the higher subsidy

burden with higher operating cost.

Outlook & Valuation

ONGC expects to increase its production volume of oil & natural gas

in both onshore and offshore going forward. We feel thatGovernment of India’s indication towards 38.8% upstream sharing

of the subsidy burden is an aberration to the historical trend and will

be rolled back to the earlier 33%. This will help the company directly

by higher crude price realisation.

At CMP INR 282, the company is trading at PE of 9x & 8.8x its FY12e

& FY13e earnings respectively. Considering the continuous demand

for crude oil and business expansion through new discoveries

domestically, as well as internationally, we remain bullish on the

stock with a price target of INR 360.

Industry

CMP (INR) 282Target (INR) 360

Upside / Downside (%) 28

52 week High/Low (INR) 368/261

Market Cap (INR Mn) 47929

3M Avg. Volumes (000’s) 4747

P/E (FY12e) 9

Shareholding Pattern (%)

Stock Performance

Performance (%)

1 Month 3 Months 1 Year

ONGC -7.2 4.7 -1.7

NIFTY -1.9 1 12.5

(INR Mn)

Particulars Actual Estimates

Total Income 161,079 188,656

EBIDTA 79,723 130,350

Reported PAT 27,909 67,950* Source: Bloomberg, Unicon Research





Standalone Financials (INR Mn)

DESCRIPTION Q4FY11 Q4FY10 YoY FY11 FY10 YoY

Net Sales 153,962 147,133 4.6% 658,418 599,876 9.8%

Other operating income 7,117 12,891 -44.8% 33,355 19,949 67.2%

Total Operating Income 161,079 160,023 0.7% 691,773 619,825 11.6%

Total Expenditure 81,357 65,843 23.6% 281,584 244,912 15.0%

EBITDA 79,723 94,180 -15.4% 410,189 374,914 9.4%

EBITDA (%) 49.5% 58.9% -936bps 59.3% 60.5% -119bps

Depreciation 47,877 44,480 7.6% 159,430 146,588 8.8%

EBIT 31,846 49,700 -35.9% 250,759 228,326 9.8%

Other Income 5,856 4,691 24.8% 25,682 22,199 15.7%

Interest 160 561 -71.5% 251 687 -63.4%

EBT 37,542 53,831 -30.3% 276,190 249,838 10.5%

Tax 9,633 16,066 -40.0% 86,950 82,163 5.8%

Profit After Tax 27,909 37,764 -26.1% 189,240 167,676 12.9%

Net Profit (%) 16.7% 22.9% -621bps 26.4% 26.1% 26bps

EPS 3.3 17.7 -81.5% 22.1 78.4 -71.8%Source: Company, Unicon Research





Unicon Investment Ranking Methodology

Rating Buy Accumulate Hold Reduce Sell

Return Range >= 20% 10% to 20% -10% to 10% -10% to -20% <= -20%

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oil & natural gas ltd - q4fy11 result update

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