A Study on Financial Analysis of Indian Oil

Corporation Limited

Submitted by
Mayank Kumar - 21BBA4109

in partial fulfillment for the award of the degree of

Bachelor of Business Administration

IN
Business Analytics

AUGUST 2022
 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude for being given

this great opportunity to perform this internship project, which has
been undoubtedly a remarkable learning experience.
I would also like to thank my mentor Itti Dogra ma’am who with his
excellent guidance and vision has supported the proceedings of this
project and journey. Without her support, this project work would have
never been possible.
 ABSTRACT

One of the most significant energy sources and the backbone of any economy is
oil and gas. In addition to refining, pipeline transportation, and marketing of
petroleum products, Indian Oil Corporation Limited also engages in the
exploration and production of crude oil and gas, the sale of natural gas, and the
development and distribution of petrochemicals. Most important part of financial
analysis is ratio analysis which include profitability ratio, solvency ratio, liquidity
ratio and investment ratio. In this study, the relationship is estabilished between
the balance sheet and profit & loss account of the company to find out the
company’s strength and weakness. Financial analysis is very essential for every
company to evaluate its performance in all financial aspects.
 INTRODUCTION
About IOCL:-

Indian Oil Corporation Limited (IOCL) is India’s largest commercial enterprise was
started in the year 1959 as Indian Oil Company Limited with first office at
Botawala Chambers, Mumbai. Later on, in the year 1964, Indian Refineries Ltd.
merged with Indian Oil Company Limited and renamed as Indian Oil Corporation
Limited. Now, its headquarter is located in New Delhi. The current Chairman of
IOCL is Shri Shrikant Madhav Vaidya. Indian Oil also operates its subsidiaries in
foreign such as Indian Oil (Mauritius) Limited, IOC Middle East FZE (UAE), Lanka
IOC PLC (Sri Lanka), IOCL (USA) Inc., USA, IOCL (Singapore) Pte. Ltd. and so on.
Indian Oil covers the entire range of petroleum value chain from refining,
marketing , pipelines, petrochemicals, natural gas to global operations. The
corporation also work for the welfare of society, environment protection,
education, sanitation, empowerment of women and other marginalized groups.
Indian Oil has refining capacity of 80.2 MMTPA as on 2020 and accounts for near
32% of total national refining capacity of 248.9 MMTPA. As on 31 March 2020, it
was owned 51.50% by the Government of India (through the President of India).
With more than 34,000 plus workforce and extensive refining, distribution and
advance marketing infrastructure, Indian Oil plays a vital role in fuelling the socio-
economic development of the country with a turnover of Rs.7,28,459.94 Crore
and market capitalization Rs.1,11,981 Crore in FY21. The company is India’s
largest contributor to the national exchequer in the form of duties and taxes.

Indian Oil year by year:-

 In 1964, Indian Oil enters into aviation business and first supply to Indian
Air Force.
 In the year 1972, Indian Oil established their R&D Centre that works in
promising and futuristic alternate energy such as Solar energy, Bio energy,
Hydrogen etc.
 Indian Oil open up World’s highest altitude fuel station in Leh, Ladakh in
1975.
 In 1993, India’s first Hydrocracker commissioned at Gujarat (Koyali)
Refinery.
  In the year 1995, Indian Oil shares listed for the first time on Bombay Stock
Exchange.
 In 2004, Indian Oil becomes first Indian corporate to touch Rs.1,50,000
Crore turnover.
 In 2010, Indian Oil launched the Petrochemical brand “PROPEL”. Under
brand PROPEL, they offers a full range of products of petrochemicals covers
over 80% of all conceivable applications of plastics.
 India’s First 100 Octane petrol XP100 and value added Indane XtraTej was
launched in 2020. XP100 petrol is used for luxury vehicles to more enhance
their performance.
 Also, since 1959, Indian Oil has commissioned 30000th fuel stations and 11
refineries across India.
 IndianOil is ranked 212th among the world’s largest corporates in Fortune’s
prestigious ‘Global 500’ listing 2021.

IOCL Working Area :-

Refining Pipelines Marketing

Indian Oil has the largest
market share among all the
oil companies in India with
a share of 28%
approximately. Indian Oil
with refining capacity of
70.05 MMTPA (Million
Metric Tonne Per Annum) is
fulfilling the demand of oil
in India.
Indian Oil is managing World’s
largest petroleum pipeline (15,113
km) network with an international
presence. They ensure safest as
well as environmental-friendly
transportation of oil and gas with
96.06 MMTPA capacity of crude oil
and product pipelines and 27.82
MMSCMD capacity of gas pipeline.
Indian Oil meet the needs o
oil and gas of millions of
people everyday through
their large and quick netwo
of fuel stations, bulk storag
terminals, LPG bottling
plants. To expand the
customer base, they has
launched Fuel@Call, a onlin
platform through which
people can easily order die
and can received at their
doorsteps.
 Petrochemicals Natural Gas

Indian Oil as the second largest
petrochemicals company in India with
market share of 15% Polymers, 6%
Purified Terephthalic Acid(PTA), 10%
Mono Ethylene Glycol(MEG) and 17%
Linear Alkyl Benzene (LAB) is working to
serve everyday needs of people. The
Company have planned to invest Rs.
35,000 crore in the petrochemicals
segment in the next few years. Besides
this, Indian Oil’s PROPEL brand of
petrochemicals are now exported to 75
countries.
Natural Gas is rapid emerging fuel and
prefer more as a greener choice over
other fuels. Indian Oil is the second
largest company in the market of RLNG
(Regasified Liquefied Natural Gas) in
India with 1,100 plus km Gas pipeline
network. They are working to more
strengthen their gas pipelines and city
gas distribution system and door to
door service of LNG. Indian Oil is
operating city gas distribution network
in more than eight different
geographical areas through JVs.

OBJECTIVES OF THE STUDY

1. To study the growth of Indian Oil Corporation Limited over the past 4 years by
evaluating profitability ratio, liquidity ratio, solvency ratio and investment
ratio of the company.

2. To analyze the financial strength and weakness of the company.

RESEARCH METHODOLOGY

1. The data is taken from secondary source which are available on the website of
Indian Oil Corporation Limited.

2. The period of the study is from 2018-19 to 2021-22.

3. The tool used in this study is ratio analysis.

 REVIEW OF LITERATURE

Mr. P. Kanagaraj, and 2Mr. Gouwsigan V (2021) The goal of the research paper is to
examine Indian Oil Corporation Limited's financial performance in terms of financial
parameters including liquidity, solvency, profitability, and efficiency position. The study
was conducted over a six-year period (2014 – 2020) to examine the company's financial
performance. The investigation was conducted using secondary data that was gathered
from the published websites of the research organisation. Ratio analysis of the balance
sheet is one of the analysis tools which is used to understand the company's financial
performance, growth ratios, profitability. A financial analysis gives a proper view of
company’s strength and weakness by forming a correlation between the components of
the balance sheet and the profit & loss account.

S. Ramya1 , N. Pooja priya dharshini2 , R. Pavithra Chandran3 (2018) In India, a

network of pipelines for crude oil and petroleum products is owned and run by Indian
Oil Corporation Limited. By using methods like ratio analysis and a common size balance
sheet, the analysis' principal goal is to ascertain the firm's liquidity, solvency, and
financial situation. Different ratios, including the current ratio, liquid ratio, absolute
liquid ratio, and turnover ratios, have been employed to assess the company's financial
success. The information used in this analysis was gathered from websites, audited
reports, and several magazines. The period of the study was from 2013 to 2017. Making
wise financial judgments and preparing more effectively and inexpensively are both
aided by this study. This analysis includes conclusions and interpretations that will help
the business increase performance. The investigation that was done has revealed that,
the company has been performing satisfactorily. However, the business should
concentrate on covering its current liabilities. In order to achieve profitability in the
upcoming years, the organisation should take care of both internal and external
elements.
OM PRAKASH AGRAWAL, DR. R. C. UPADHYAY (2017) The oil and gas sector in India
began to expand at a relatively modest rate. The northeastern region, particularly
Digboi in the state of Assam, was where the oil and gas sector first began to operate.
The northeastern states of India were the only ones producing petroleum and looking
for new places to find and mine petroleum products up until the 1970s. However, the
implementation of the Industrial Policy Resolution in 1956, which stressed focusing on
the growth and promotion of industries in India, brought about a significant
development in the Indian oil and gas industry. The development of the Indian
economy as an industrial economy was largely attributed to the oil and gas industry in
India. The assessment is also based on how deregulation has affected the company's
profitability, solvency, and liquidity. Deregulation has helped public sector businesses
gradually overcome their loss problem. This analysis revealed that IOCL, a public
corporation, was consistently losing money prior to deregulation because the
government was subsidising high oil and gas prices and controlling prices at the federal
level. Following deregulation, businesses gradually overcame this issue, which increased
their profitability and near-term viability.

Divya Bharathi.R & N.Ramya (2020) The goal of the study is to determine Indian Oil
Corporation Limited's financial performance. The report is based on Indian Oil
Corporation's accounting data from the previous five years. The primary goals of the
study are to understand the company's financial performance, financial growth, and
profit margins. The research shows that the financial performance is reasonable. The
company's financial performance has been holding steady, but it has room to grow if it
focuses on lowering its administrative, selling, and operating costs. Both the company's
sales volume and gross profit should rise. With increased operations and operating cash
flows, the company was able to fully fund its obligations for capital investments and
higher levels of working capital commitment.

Dr.M.Yasodha, 2R.Haripriya, 3R.Haripriya, 4K.Kirthika (2021) The oil and gas industry
is very important to our economy. The study used Indian Oil Corporation Limited, which
has 60 years of outstanding performance. The study's goal is to assess the company's
financial standing over a five-year period (2015-2016 to 2019-2020). For the study,
secondary data were taken. For examination, a number of ratios including the current
ratio, quick ratio, absolute liquid ratio, basic earnings per share, net profit ratio, return
on equity, debt ratio, proprietary ratio, and debt-equity ratio have been employed. Due
to the epidemic, overall work performance was decreased. It is concluded that by
increasing revenue and keeping a very close eye on expenses, the corporation can
further enhance its performance. To lower liabilities, borrowings should be decreased.

Pawan Kumar, DR. V. K. Gupta, DR. Anil Kumar Goyal (2013) In India, the oil and gas
sector makes up around 40% of the country's major energy sources. One of India's six
major industries, oil and gas has a substantial forward link to the whole economy. India
is the ninth largest importer of crude oil and the world's fifth-largest user of petroleum.
This study will improve the understanding of financial statements among a variety of
stakeholders, including government agencies, suppliers, creditors, and shareholders as
well as investors and investors. The selection, assessment, and interpretation of
financial data constitute financial analysis. Internally, financial analysis can be used to
assess matters like profitability, liquidity, solvency, overall performance, operational
effectiveness, and efficiency. The study revealed that the there is need to improve the
profitability ratio. Profitability ratio include net profit margin and gross profit margin.

Renu Hooda & Kuldip Singh Chhikara (2018) The study, which attempted to examine
the trends of financial performance indicators such as total assets, total liabilities,
turnover and net income, as well as to analyse the financial health of Indian Oil
Corporation Limited via ratio analysis during the period when the world economy was
hit by various political and economic events, revealed that the company's total assets
grew at a faster rate than its liabilities, with net income, equity, and retained earnings
coming in second and third, respectively. The numerous facets of the Indian economy
were directly impacted by the events, which also had an impact on the company's
finances. The company's liquidity situation was deemed to be unsatisfactory, and its
solvency position is a sign that it was less dependent on borrowed money.

Kangkan Deka (2014) The production company's performance analysis project is more
than just a project's task. However, a basic understanding of and expertise in how to
assess the company's financial performance The study found that businesses need to
think about things like capital employment and working capital management. The
company must use its resources in a responsible manner.
 INDIAN OIL CORPORATION LIMITED
[CIN- L23201MH1959GOI011388]

STATEMENT OF STANDALONE AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31ST MARCH 2022
(Rs. in Crore)
AUDITED UNAUDITED AUDITED AUDITED RESULTS
PARTICULARS RESULTS FOR THE QUARTER ENDED FOR THE YEAR ENDED
31.03.2022 31.12.2021 31.03.2021 31.03.2022 31.03.2021 31.03.2020 31.03.2019
A. FINANCIALS
1. Revenue from Operations 2,06,460.89 1,97,172.01 1,63,732.98 7,28,459.94 5,14,890.47 5,66,949.64 6,05,932.34
2. Other Income 951.7 1375.28 1,101.67 4324.26 4,550.72 3,571.39 3,128.51
3. Total Income (1+2) 2,07,412.59 1,98,547.29 1,64,834.65 7,32,784.20 5,19,441.19 5,70,521.03 6,09,060.85

4. EXPENSES
(a) Cost of Materials Consumed 90,401.52 77,629.79 55,099.13 2,94,501.48 1,56,647.96 2,47,077.03 2,69,679.61
(b) Excise Duty 29,173.58 30,383.85 39,891.63 1,30,296.19 1,36,832.86 80,693.19 78,231.08
(c) Purchases of Stock-in-Trade 66,144.62 65,619.85 49,845.52 2,21,078.10 1,43,305.73 1,78,535.49 1,79,055.50
(d) Changes in Inventories (Finished Goods, Stock-in-trade and Work-In Progress) -6,154.38 720.47 -8,622.25 -12,197.02 -5,547.57 -6,410.43 -3,011.13
(e) Employee Benefits Expense 3,193.75 2,688.33 3,135.34 10,991.70 10,712.04 8,792.65 11,102.17
(f) Finance Costs 1,607.24 979.13 1,072.91 4,829.10 3,093.92 5,979.45 4,311.03
(g) Depreciation and Amortization Expense 2,887.30 2,778.70 2,579.45 11,005.91 9,804.30 8,766.10 7,514.29
(h) Impairment Loss (including reversal of impairment loss) on Financial Assets 6.59 -471.00 1,113.83 -136.38 1,195.45 NA NA
(i) Net Loss on de-recognition of Financial Assets at Amortised Cost 167.74 3.92 5.19 172.75 7.69 5.73 3.29
(j) Other Expenses 11,900.25 10,734.69 9,762.80 40,509.30 33,673.16 39,471.29 37,048.09
Total Expenses 1,99,327.91 1,91,067.73 1,53,883.55 7,01,051.13 4,89,725.54 562,910.50 583,933.93

5. PROFIT/ (LOSS) BEFORE TAX (3-4) 8,084.68 7,479.56 10,951.10 31,733.07 29,715.65 -3,694.11 25,126.92

6. TAX EXPENSES
(a) Current Tax 2,223.19 1,376.91 2,232.94 6,913.00 6,761.03 -165.89 5,100.94
(b) Deferred Tax -160.39 241.85 -63.14 635.97 1,118.58 -4,841.45 3,131.83
2,062.80 1,618.76 2,169.80 7,548.97 7,879.61 -5,007.34 8,232.77

7. NET PROFIT/(LOSS) for the period (5-6) 6,021.88 5,860.80 8,781.30 24,184.10 21,836.04 1,313.23 16,894.15

8. Other Comprehensive Income

A (i) Items that will not be reclassified to profit or loss 2,562.10 -1,502.00 1,607.39 6,228.96 4,690.93 -11,056.28 -1,982.05
A (ii) Income Tax relating to items that wiII not be reclassified to profit or loss -17.97 205.93 -130.21 128.56 -204.76 165.33 -463.51
B (i) Items that will be reclassified to profit or loss -81 -85.58 -220.08 -130.6 119.71 647.98 155.51
B (ii) Income Tax relating to items that wiII be reclassified to profit or loss 35.26 2.26 66.02 32.91 -21.99 -166.35 -34.11
2,498.39 -1,379.39 1,323.12 6,259.83 4,583.89 -10,409.32 -2,324.42

9. Total Comprehensive Income for the period (7+8) 8,520.27 4,481.41 10,104.42 30,443.93 26,419.93 -9,096.09 14,569.73

10. Paid-up Equity Share Capital (Face value-'{ 10 each) 9,414.16 9,414.16 9,414.16 9,414.16 9,414.16 9,414.16 9,414.16

11. Other Equity excluding revaluation reserves 1,22,105.32 1,01,319.00 84,587.83 99,476.47

12. Earnings per Share ('l;) (Refer Note 4)

(a) Basic 6.56 6.38 9.56 26.34 23.78 1.43 17.89
(b) Diluted 6.56 6.38 9.56 26.34 23.78 1.43 17.89
(Face value is Rs.10 each)

B. PHYSICALS (IN MMT)

1. Product Sales
(a) Domestic 21.789 21.021 21.204 80.493 75.573 84.288 84.65
(b) Export 1.521 1.57 1.387 5.914 5.454 5.408 5.244
2. Refineries Throughput 18.265 17.404 17.592 67.665 62.351 69.419 71.816
3. Pipelines Throughput 22.061 21.779 21.849 83.248 76.019 85.349 88.527

FINANCIAL REPORT OF IOCL

STATEMENTS OF ASSETS AND LIABILITIES - STANDALONE (Rs. in
Crore)
AS AT
31.03.202 31.03.202 31.03.202 31.03.201
2 1 0 9
AUDITED AUDITED AUDITED AUDITED
A. ASSETS
1. Non-Current Assets
1,44,313.5 1,40,916.1 1,31,752.7 1,17,331.2
(a) Property, Plant and Equipment 3 4 6 2
(b) Capital Work-in-Progress 42,764.60 31,600.61 28,134.10 22,160.52
(c) Intangible Assets 2,575.31 2,483.80 1,929.04 1,376.61
(d) Intangible Assets under Development 1,681.47 1,451.52 1,603.65 1,438.44
(e) Financial Assets
(i) Investments
Equity investment in Subsidiaries, JVs and Associates 21,868.16 19,191.01 17,578.24 17,956.51
Other Investments 28,153.66 20,561.11 13,473.93 23,465.37
(ii) Loans 2,263.92 2,389.73 3,241.87 2,292.17
(iii) Other Financial Assets 989.47 218.82 285.12 205.66
(f) Income Tax Assets(Net) 2,748.06 2,428.85 4,186.76 1,347.85
(g) Other Non-Current Assets 3,659.10 2,828.59 2,863.07 3,903.38
251,017.2 224,070.1 205,048.5 191,477.7
Sub Total - Non-Current Assets 8 8 4 3

2. Current Assets
1,03,206.9
(a) Inventories 4 78,188.01 63,677.62 71,470.38
(b) Financial Assets
(i) Investments 7,764.82 8,867.29 8,086.39 8,518.09
(ii) Trade Receivables 18,136.57 13,379.56 12,844.09 15,457.83
(iii) Cash and Cash Equivalents 709.91 313.74 535.56 38.31
(iv) Bank Balances other than above 173.07 1,354.63 53.58 49.34
(v) Loans 439.95 616.51 1,069.67 1,364.74
(vi) Other Financial Assets 3,347.43 3,884.76 15,629.76 21,337.08
(c) Other Current Assets 3,373.34 3,186.50 3,841.46 3,985.52
109,791.0 105,738.1 122,221.2
Sub Total - Current Assets 137152.03 0 3 9
Assets Held for Sale 169.79 192.90 237.61 227.40
1,37,321.8 1,09,983.9 105,975.7 122,448.6
2 0 4 9
TOTAL ASSETS
3,88,339.1 3,34,054.0 3,11,024.2 313,926.4
0 8 8 2

B. EQUITY AND LIABILITIES

1. Equity
(a) Equity Share Capital 9,181.04 9,181.04 9,181.04 9,181.04
1,22,105.3 1,01,319.0
(b) Other Equity 2 0 84,587.83 99,476.47
1,31,286.3 1,10,500.0 1,08,657.5
Sub Total - Equity 6 4 93,768.87 1

LIABILITIES
2. Non-Current Liabilities
(a) Financial Liabilities
(i) Borrowings 50,579.83 48,965.87 49,250.64 34,666.36
(ii) Lease Liabilities 6,557.16 6,442.08 NA NA
(iii) Other Financial Liabilities 913.79 847.49 789.58 616.03
(b) Provisions 907.81 943.93 919.05 883.66
(c) Deferred Tax Liabilities (Net) 13,627.36 12,964.73 11,413.14 15,823.07
(d) Other Non-Current Liabilities 3,169.00 2,576.10 2,042.48 1,598.09
Sub Total - Non-Current Liabilities 75,754.95 72,740.20 64,414.89 53,587.21

3. Current Liabilities
(a) Financial Liabilities
(i) Borrowings 60,218.67 45,447.13 63,486.08 48,593.55
(ii) Lease Liabilities 2,107.16 1,472.41 NA NA
(iii) Trade Payables
Total outstanding dues of Micro and Small Enterprises 799.84 547.01 232.47 235.24
Total outstanding dues of creditors other than Micro and Small
Enterprises 41,669.50 33,043.68 25,019.11 37,147.35
(iv) Other Financial Liabilities 48,051.50 43,638.45 42,550.71 43,973.77
(b) Other Current Liabilities 18,445.46 16,485.72 12,050.96 12,080.50
(c) Provisions 9,394.27 9,381.59 9,567.47 10,137.89
(d) Current Tax Liabilities (Net) 611.39 797.85 NA NA
1,81,297.7 1,50,813.8 1,52,906.8 1,52,168.3
Sub Total - Current Liabilities 9 4 0 0

3,88,339.1 3,34,054.0 3,11,090.5 3,14,413.0

TOTAL EQUITY AND LIABILITIES 0 8 6 2
STATEMENT OF CASH FLOWS- STANDALONE (Rs. in Crore)
FOR THE YEAR ENDED
31.03.2022 31.03.2021 31.03.2020 31.03.2019
AUDITED AUDITED AUDITED AUDITED
A. CASH FLOWS FROM OPERSTING ACTIVITIES
1.Profit/(Loss) Before Tax 31,733.07 29,715.65 -3,694.11 25,126.92
2. Adjustments for:
Depreciation and Amortisation 11,005.91 9,804.30 8,766.10 7,514.29
Loss/ (Profit) on sale of Assets (net) -23.15 85.09 93.94 152.87
Loss/ (Profit) on sale/ write-off of Investments (net) 4.73 -4.12 NA 1.60
Amortisation of Capital Grants -25.96 -25.29 -134.3 -99.99
Provision for Probable Contingencies (net) -92.14 -227.65 -1,353.49 -1,492.97
MTM Loss/ (gain) arising on financial assets/liabilities as at fair value through profit and loss 205.71 -205.56 59.11 2.77
Unclaimed/ Unspent liabilities written back -127.56 -371.7 -155.27 -312.03
Bad Debts, Advances & Claims written off 184.21 10.61 11.98 9.07
Provision for Doubtful Debts, Advances, Claims and Obsolescence of Stores (net ) -170.07 564.98 -599.54 1,025.82
Impairment Loss on Financial Assets -136.38 1,195.45 NA NA
MTM Loss/ (Gain) on Derivatives -68 -140.87 170.58 66.82
Remeasurement of Defined Benefit Plans through OCI -768.98 22.42 -154.40 148.39
Interest Income -1,868.67 -1,760.12 -1,917.23 -1,696.41
Dividend Income -2,318.68 -1,241.03 -1,592.02 -1,348.41
Finance costs (excluding exchange effect) 3,816.33 3,921.00 5,979.45 4,311.03
Amortisation and Remeasurement (Net) of PMUY Assets 587.97 1,056.60 NA NA
3. Operating Profit before Working Capital Changes (1+2) 41,937.34 42,399.76 5,480.80 33,409.77
4. Change in Working Capital (excluding Cash &Cash Equivalents):
Trade & Other Receivables -3,491.67 9,359.57 8,945.28 -12,478.68
Inventories -25,044.09 -14,513.92 7,777.39 -6,176.09
Trade and Other Payables 14,997.11 15,465.64 -13,192.37 3,136.83
Change in Working Capital -13,538.65 10,311.29 3,530.30 -15,517.94
5. Cash Generated from Operations (3+4) 28,398.69 52,711.05 10,446.08 17,881.33
6. Less: Taxes paid 7,221.35 3,927.07 1,806.72 5,459.53
7. Net Cash Flow from Operating Activities (5-6) 21,177.34 48,783.98 8,639.36 12,421.80

B. CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of Property, Plant and Equipment/ Transfer of Assets 542.63 998.9 697.39 1,068.32
Purchase of Property, Plant & Equipment and Intangible Assets -4,076.60 -4,559.25 -11,678.00 -6,985.67
Expenditure on Construction Work-in-Progress -17,814.07 -16,602.57 -18,716.35 -15,370.74
Proceeds from sale of financial instruments (other th an working capital) -4.73 115.28 NA 500.00
Investments in Subsidiaries -1,877.43 -1.13 -89.95 -2,516.47
Purchase of Other Investments -1,710.97 -4,580.49 -735.67 -513.43
Receipt of government grants (Capital Grant) 703.85 580.66 22.34 10.20
Interest Income received on Investments 1,822.11 1,749.88 2,030.79 1,687.70
Dividend Income on Investments 2,318.68 1,241.03 1,592.02 1,348.63
Net Cash Generated/ (Used) in Investing Activities -20,096.83 -21,057.69 -26,877.43 -20,771.46

C. CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from Long-Term Borrowings 10,613.23 10,050.40 18,352.92 18,758.99
Repayments of Long-Term Borrowings -587 -2,048.63 -3,406.11 -2,356.61
Repayments of Lease Liabilities -1,761.39 -1,106.60 NA
Proceeds from/ (Repayments of) Short-Term Borrowings 6,309.80 -22,313.22 14,892.53 11,785.52
Interest paid -4,362.99 -4,146.87 -5,301.72 -3,775.27
Dividend/ Dividend Tax paid -10,896.02 -8,383.19 -5,802.30 -11,635.34
Net Cash Generated/ (Used) from Financing Activities -684.34 -27,948.11 18,735.32 12,777.29

D. NET CHANGE IN CASH & CASH EQUIVALENTS (A+B+C) 396.17 -221.82 497.25 -15.17

E1. Cash & Cash Equivalents as at end of the period 709.91 313.74 535.56 38.31
Less:
E2. Cash & Cash Equivalents as at the beginning of period 313.74 535.56 38.31 53.48

NET CHANGE IN CASH & CASH EQUIVALENTS (El- E2) 396.17 -221.82 497.25 -15.17

FOR THE YEAR ENDED

31.03.2022 31.03.2021 31.03.2020 31.03.2019
921.43 -1,177.78 5,881.28 -336.21
Notes:
1. Net Cash Flow From Financing Activities includes following non-cash changes:
(Gain)/Loss due to changes in Exchange Rate
2. Statement of Cash Flows is prepared using indirect method as per Indian Accounting Standard 7:
Statement of Cash Flows.
MARKET CAPITALISATION OF IOCL
As of 31st March 2022, The market capitalization of Indian Oil was Rs. 1,11,981
Crore that makes Indian Oil world’s 1195th most valuable company on the basis of
market capitalization. Market cap or market capitalization is basically means the
total value of all a company’s shares of stock i.e. valuation of the company based
on its current share price and the total number of outstanding stocks.

Year Market Capitalisation (Rs. in Crore)

2021-22 1,11,981
2020-21 86,469
2019-20 76,867
2018-19 1,53,310
 RATIO ANALYSIS
Ratio analysis is a mathematical technique for analysing a company's financial
documents, such as the balance sheet and income statement, to gather
knowledge about its liquidity, operational effectiveness, and profitability. It is one
of the most important tool of financial analysis. By carefully examining both
historical and current financial statements, investors and analysts use ratio
analysis to assess a company's financial health. Comparative data may show how
a business is doing through time and be used to predict how it will likely do in the
future. This information can be used to assess how a company compares to
others in its industry and to benchmark its financial performance against industry
averages.

1. Profitability Ratios:-

These ratio demonstrate how effectively a business can turn a profit from its
operations.

(i) Net Profit Margin:-

Net Profit Margin is calculated by dividing Net Profit After Tax with Revenue from
Operations and multiply with 100 to convert into percentage form. Net Profit
Margin is a strong indicator of company’s success and it is stated as a percentage.
A higher net profit margin means that company is able to effectively control its
cost i.e. firm provide goods or services at a price higher than its costs and it is
possible only when firm has efficient management, strong pricing strategies. On
the other hand, a low net profit margin means that a firm has inefficient
management and poor pricing strategies.

Year Net Profit After Tax Revenue from NET PROFIT

(Rs. in crore) Operations MARGIN (%)
(Rs. in crore)
2021-22 24,184.10 7,28,459.94 3.32
2020-21 21,836.04 5,14,890.47 4.24
2019-20 1,313.23 5,66,949.64 0.23
2018-19 16,894.15 6,05,932.34 2.79
 Net Profit Margin (%)
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2021-22 2020-21 2019-20 2018-19

From the above data, It is clear that the net profit margin of the company was
2.79% during the year 2018-19 but failed to maintain its position in 2019-20 and
net profit margin decreased to 0.23%. However, net profit eventually increased
upto 4.24% in the year 2020-21 but again it decreased to 3.32 in the year 2021-
22.

(ii) Gross Profit Margin:-

The amount of revenue that remains in a given accounting period after company
pays for labour and cost of material used is termed as gross profit margin. Gross
profit margin is calculated by dividing gross profit with sales (revenue from
operation) and multiply with 100 to convert into percentage form.

Year Gross Profit Sales Gross Profit

(Rs. in Crore) (Rs. in Crore) Margin
(%)
2021-22 70,387.15 7,28,459.94 9.66
2020-21 72,556.35 5,14,890.47 14.09
2019-20 54,233.5 5,66,949.64 9.56
2018-19 75,865.02 6,05,932.34 12.52
 Gross Profit Margin (%)
16
14
12
10
8
6
4
2
0
2021-22 2020-21 2019-20 2018-19

From the above data, It is clear that gross profit margin of the company is not
stable. It get fluctuating over the past 4 years. The highest gross profit margin
during the study is 14.09% which came in the year 2020-21.

2. Liquidity Ratio:-

A liquidity ratio is used to determine the company’s ability to pay its short term
liabilities using its current assets.

(i) Current Ratio:-

Current ratio is calculated by dividing current assets with current liabilities. The
ideal current ratio of firm should be 2:1.

Year Current Assets Current Liabilities Current Ratio

(Rs. in crore) (Rs. in crore)

2021-22 1,37,152.03 1,81,297.79 0.76

2020-21 1,09,791.00 1,50,813.84 0.73
2019-20 1,05,738.13 1,52,906.80 0.69
2018-19 1,22,221.29 1,52,168.30 0.81
 Current Ratio
0.82
0.8
0.78
0.76
0.74
0.72
0.7
0.68
0.66
0.64
0.62
2021-22 2020-21 2019-20 2018-19

From the above data, it is concluded that the company could not achieved ideal
ratio in any of the year during the study which shows that the liquidity position of
the company is poor and company is not able to meet its current liabilities.

(ii) Quick Ratio (Acid Test Ratio) :-

Quick ratio is the sum of cash and accounts receivable divided by current liabilities. Quick
ratio is same as current ratio. Quick assets are the assets which are either cash or easily
convert in to cash without any major loss in the value. The ideal quick ratio of company
should be 1:1.

Year Cash Accounts Current Quick

(Rs. in crore) Receivable Liabilities Ratio
(Rs. in crore) (Rs. in crore)
2021-22 709.91 18,136.57 1,81,297.79 0.10
2020-21 313.74 13,379.56 1,50,813.84 0.09
2019-20 535.56 12,844.09 1,52,906.80 0.08
2018-19 38.31 15,457.83 1,52,168.30 0.10
 Quick Ratio
0.12
0.1
0.08
0.06
0.04
0.02
0
2021-22 2020-21 2019-20 2018-19

From the above data, it is concluded that the company unable to achieved ideal quick ratio
in any of the year during the study.

3. Solvency Ratio :-

Solvency ratios are an essential part of the financial analysis that determines if a firm has
enough cash flow to handle its upcoming debt commitments. Leverage ratios are another
name for solvency ratios. Solvency ratio measures firm’s ability to pay its long term debts.

(i) Debt to Equity Ratio:-

The debt to equity ratio considers both the equity held by shareholders and the company's
obligations. The optimal ratio to use when evaluating a company's financial success is its
debt to equity ratio. Additionally, it might be useful in determining the company's capacity
to meet its debt obligations.
A high debt to equity ratio puts businesses at risk financially. It indicates that the
corporation is financing itself more through debt than through equity.
A low debt to equity ratio indicates that a company does not require debt financing because
it has enough cash in hand in the form of equity.

Year Total Liabilities Equity Debt to Equity

(Rs. in crore) (Rs. in crore) Ratio
2021-22 257,052.74 1,31,286.36 1.95
2020-21 223,554.04 1,10,500.04 2.02
2019-20 217,321.69 93,768.87 2.31
2018-19 205,755.51 1,08,657.51 1.89
 Debt to Equity Ratio
2.5

1.5

0.5

0
2021-22 2020-21 2019-20 2018-19

The ideal debt-to-equity ratio is anything between 1 to 1.5 or sometimes 2.0 is also
considered as a good debt-to-equity ratio depending on the industry. But exceeding 2.0 is
get risky for the firm. From the above data, it is concluded that Indian Oil has positive debt-
to-equity in past 4 years.

(ii) Debt to Total Assets Ratio :-

The ratio of a company's debt to total assets is an indicator of its financial leverage. It
reveals what proportion of a company's overall assets were financed by creditors. To put it
another way, it is the sum of a company's liabilities divided by the sum of its assets.
If the debt-to-assets ratio is greater than one, a business has more debt than assets. If the
ratio is less than one, the business has more assets than debt. A company with a high
ratio of total debt to total assets has a relatively high financial risk and vice-versa.

Year Total Liabilities Total Assets Debt to Total

(Rs. in crore) (Rs. in crore) Assets Ratio
2021-22 257,052.74 388,169.31 0.66
2020-21 223,554.04 333,861.31 0.66
2019-20 217,321.69 310,786.67 0.69
2018-19 205,755.51 313,699.02 0.65
 Debt to Total Assets Ratio
0.7
0.69
0.68
0.67
0.66
0.65
0.64
0.63
2021-22 2020-21 2019-20 2018-19

From the above data, it is examined that IOCL has debt to total assets ratio less than 1 and
has more assets than debts.

4. Investment Ratio :-

Investment ratio are used to assess the company’s ability to make a positive and profitable
returns on investment.

(i) Earning Per Share Ratio :-

Earnings per share (EPS) is a metric investors commonly use to value a stock or company
because it indicates how profitable a company is on a per-share basis.
A corporation is more likely to be profitable the greater its EPS, yet this doesn't ensure its
future performance.

Year Net Profit After Number of Equity Earning Per

Tax Shares (Face Share Ratio
(Rs. in crore) value= Rs.10
each)
2021-22 24,184.10 918.1 26.34
2020-21 21,836.04 918.1 23.78
2019-20 1,313.23 918.1 1.43
2018-19 16,894.15 918.1 18.40
 Earning Per Share Ratio
30

25

20

15

10

0
2021-22 2020-21 2019-20 2018-19

From the above data, it is examined that in the year 2018-19, earning per share of Indian Oil
Corporation Limited was 18.40 which drastically decreased to 1.43 in next year but it
increased to 23.78 in the year 2020-21 and 26.34 in the year 2021-22.
CONCLUSION
After the performing the financial analysis of Indian Oil Corporation Limited from
various financial keys like profitability, liquidity, solvency and investment, it is
concluded that the profitability of the company is poor because the net profit
margin and gross profit margin need to be improved.

Secondly, the ideal current ratio and ideal quick ratio of any company is 2:1 and
1:1 respectively but unfortunately Indian Oil failed to achieve this ratio in the both
case during the period of study. The liquidity ratio shows the company are able to
pay its current liabilities or not but undoubtedly Indian Oil failed to meet the
condition. Company needs to improve this ratio.

Third, The company's debt-to-equity ratio ranges from 1.89 to 2.31, with a
desirable average of 2.04. Depending on the industry, a debt-to-equity ratio of
between 1 and 1.5 or even 2.0 is also regarded as a desirable debt-to-equity ratio.
However, going above 2.0 becomes risky for the company. The debt to total
assets ratio, which ranges from 0.65 to 0.69 with an average of 0.66,
demonstrates the firm's strong solvency situation.

Fourth, earnings per share, which range from 1.43 to 26.34, is an investment ratio
that is also strong and demonstrates the company's ability to raise shareholders'
wealth.
REFERENCES
https://iocl.com/pages/financial-performance-overview

https://www.moneycontrol.com/company-facts/indianoilcorporation/history/IOC

https://mopng.gov.in/en

https://iocl.com/

https://iocl.com//uploads/IOC_17052022162013_IOC_BM_Outcome_Q4_21_22.pdf

S. Ramya, N. Poojapriyadharshini and R. Pavithra Chandran (2018), “Financial Analysis &

Performance of Indian Oil Corporation Limited” International Journal of Advance Research
and D.

OM PRAKASH AGRAWAL, DR. R. C. UPADHYAY (2017). FINANCIAL PERFORMANCE ANALYSIS

OF INDIAN OIL CORPORATION DURING PRE AND POST DEREGULATION, Research Scholar
(Jiwaji University, Gwalior), Professor, KRG College, Gwalior.

Mr. P. Kanagaraj, Mr. Gouwsigan V (2021) Assistant Professor, Department of Commerce

with Professional Accounting, Dr. N.G.P. Arts and Science College, “A STUDY ON FINANCIAL
PERFORMANCE OF INDIAN OIL CORPORATION LIMITED”.

Divya Bharathi.R & N.Ramya (2020) “ A STUDY ON FINANCIAL PERFORMANCE ANALYSIS OF

INDIAN OIL CORPORATION LIMITED”, EPRA International Journal of Research and
Development (IJRD), Volume 5, Issue: 3, ISSN: 2455-7838(Online).

Dr.M.Yasodha, 2R.Haripriya, 3R.Haripriya, 4K.Kirthika (2021) “ Ratio Analysis of Indianoil

Corporation Limited”, PSGR Krishnammal College for Women, Coimbatore, Tamil Nadu,
India, Students, B.Com Professional Accounting, Annals of R.S.C.B., ISSN:1583-6258, Vol. 25,
Issue 4, 2021, Pages. 4462 – 4468.
Pawan Kumar, DR. V. K. Gupta, DR. Anil Kumar Goyal (2013) “ Financial Analysis of Indian
Oil Corporation Limited” Research Scholar, Meawar University, Chittorgarh, Department of
Account, Law & Commerce, K.R. (PG) College, Mathura, Associate Professor, Rukmini Devi
Institute of Advanced Studies, Rohini. Volume 4, Issue No. 07.

Renu Hooda & Kuldip Singh Chhikara (2018) “FINANCIAL PERFORMANCE ANALYSIS OF
INDIAN OIL CORPORATION LIMITED” Research Scholar & Professor ,Department of
Commerce, Maharshi Dayanand University, Rohtak, Haryana. Volume 5, Issue 4.

Kangkan Deka (2014) “A Project Report on Performance Analysis of Indian Oil Corporation
Analysis”, MBA, Pondicherry University, Pondicherry.

PAWAN KUMAR
RESEARCH SCHOLAR
MEAWAR UNIVERSITY
CHITTORGARH

DR. V. K. GUPTA
READER
DEPARTMENT OF ACCOUNT,
LAW & COMMERCE
K. R. (PG) COLLEGE
MATHURA
PAWAN KUMAR
RESEARCH SCHOLAR
MEAWAR UNIVERSITY
CHITTORGARH

DR. V. K. GUPTA
READER
DEPARTMENT OF ACCOUNT,
LAW & COMMERCE
K. R. (PG) COLLEGE
MATHURA