IndianOil’s group company, Chennai Petroleum Corporation’s shares tanked after the company reported its quarterly results for the September quarter (Q2FY23). The company’s shares were trading at ₹ 208.00 apiece at 11:47 AM on Thursday. This is an 11.22% fall as compared to its closing price of ₹ 234.30 apiece on Tuesday’s closing bell.
On a consolidated basis, Chennai Petroleum Corporation reported a 120% growth in its total revenues at ₹ 19,508.82 crores in September 2022, as compared to ₹ 8,856.06 crores in September 2021. However, its consolidated net profit tanked 72.27% to ₹ 16.93 crores in September 2022 from ₹ 61.05 crores in September 2021.
When compared with the June quarter (Q1FY23), the company’s net profit has highly diminished by 99.28% to ₹ 16.93 crores from ₹ 2357.62 crores in June 2022. Analysts say that a sharp fall in the gross refining margins (GRM) combined with the impact on profits of the special additional export duty on oil, resulted in a fall in the net profits of the company.
The company’s EBITDA stood at ₹ 231.59 crores in September 2022, down 24.79% from ₹ 307.93 crores in September 2021. Further its EPS decreased to ₹ 1.14 in September 2022 from ₹ 4.10 in September 2021.
Despite lower profits, there was a sharp improvement in the debt service coverage ratio in H1 (the first half of a fiscal year, April through September) from 2.60X to 6.37X year-on-year. In addition, its interest coverage ratio has also improved from 6.69X to 26.41X and its operating margins for the first half were higher at 7.86% compared to 2.10% in the H1 of the previous fiscal year.
On a year-to-date basis, Chennai Petrochemicals is a multibagger stock. Its share price has increased from ₹ 103.30 to the current levels, indicating multibagger returns of 101.65%. Therefore if an investor would have invested ₹ 1 lakh in the company’s shares at the beginning of this year, the value of their holdings would have been ₹ 2.01 lakhs today!
Written by Simran Bafna
