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Financial Analysis Insights

This document contains financial information for ONGC from 2015-2019, including cash flows, profits, assets, debts, and ratios. It then performs various valuation methods to estimate the intrinsic value of ONGC, including discounted cash flow analysis, relative valuation using P/E and PEG ratios compared to competitors, and calculating an estimated price per share based on average P/E multiples. The analyses suggest that ONGC is currently undervalued based on its fundamentals.

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swaroop shetty
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© © All Rights Reserved
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216 views10 pages

Financial Analysis Insights

This document contains financial information for ONGC from 2015-2019, including cash flows, profits, assets, debts, and ratios. It then performs various valuation methods to estimate the intrinsic value of ONGC, including discounted cash flow analysis, relative valuation using P/E and PEG ratios compared to competitors, and calculating an estimated price per share based on average P/E multiples. The analyses suggest that ONGC is currently undervalued based on its fundamentals.

Uploaded by

swaroop shetty
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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2015 2016 2017 2018

 Cash Generated from/(used in) Operations 33950.42 46292.49 45780.48 56792.1


Taxes -9433.13 -6370.95 -8209.68 -10078.1
FCFF before cap ex 24517.29 39921.54 37570.8 46714
Purchase of Fixed asset and other investments -16905.98 -18123.03 -21154.03 -27254.59
sale of fixed assets and investment 41.87 26 328.77 5092.69
Net purchases( sold - purchase) -16864.11 -18097.03 -20825.26 -22161.9
FCFF 7653.18 21824.51 16745.54 24552.1
HPR 2.8516917 0.7672814 1.4661874

AR 0.2542873

FCFE
Interest 244.363 272.209 308.42 387.366
7408.817 21552.301 16437.12 24164.734
Net Debt 53944.47 45500.17 80029.27 106549.94
FCFE 61353.287 67052.471 96466.39 130714.67
HPR 1.0928913 1.4386702 1.3550282
fcfe FCFF-INT*1-T+NET DEBT
fcff+interest=fcfe
Dividend discount approach
eps,dps,payout ratio,ROE,b, g = ROE*b

COD interest interest/deb 0.0045299 0.0059826 0.0038538

0.0044106
2015 2016 2017 2018 2019
Equity 180454.4 197813.64 194385.22 204018.93 218140.76 tsf
Debt 53944.47 45500.17 80029.27 106549.94 107742.48 net debt
Total 234398.87 243313.81 274414.49 310568.87 325883.24
weight of equity 0.76986036665 0.812997996291291 0.7083635 0.6569201 0.6693832
weight of debt 0.23013963335 0.187002003708709 0.2916365 0.3430799 0.3306168
ke - future
2 1-current value
0.254287250581263 1/ke
2019 Projected cash flows PV DCF
61248.46 cf 2020 23677.725 0.87719298245614 20769.934210526
-15873.94 minus 2021 29597.15625 0.7694675284703 22774.050669437
45374.52 equals 2022 36996.4453125 0.67497151620202 24971.546786663
-26635.16 cf-invest act 2023 46245.556640625 0.59208027737019 27381.08200292
202.82 cf investing 2024 57806.9458007812 0.51936866435982 30023.116231272
-26432.34 Sum of DCF 125919.72990082
18942.18 minus
0.7715096

b/s finance cost supernormal beta 1-4-2015 to 31-3-19


436.471 interest*(1-tax rate) 1 year beta stable beta
18505.709
107742.48 capm=rf+beta*(rm) Ke
126248.19 present values acco rf-6.5 Kd
0.9658303 rm- 8.5 Terminal value

terminal value
pv of terminal value
Enterprise value
Intrinsic value
0.0036355 0.0040511

Kd 0.004410584865272
Ke 0.134893
WACC 0.09183366900554
beta
15 to 31-3-19 0.982 5 year
1-4-2018 to 31-3-19 0.9482 1 yearr
BETA 0.9707333 calculate supernormal and beta if there are variations then allocate 2/3 and 1/3
0.134893
0.0044106 WACC 0.0918337
FCFF*(1+G)/WACC-G

1077687 ibef industry gr or gdp 5-6%


559716.67
577893.92
450.31022 non of o/s shares
cate 2/3 and 1/3
DUPOINT ANALYSIS

Mar-15
Tax burden NET PROFIT/PROFIT BEFORE TAX 0.67
Interest burden PROFIT BEFORE TAX/EBIT 0.9998949469878
EBIT Margin EBIT/SALES 0.3204743857197
asset utilization SALES/ASSETS 0.4834349184374
financial leverage ASSETS/EQUITY 1.1854769587315
ROE 0.122633677863

operating efficency net income/sales 0.21398267861263

18,255.54

   Profit Before Tax 26,555.23


   Reported Net Profit 17,732.95
Earnings before interest and tax 26,558.02
Interest 2.79
   Net Sales 82,870.96
Total Assets 171,421.13
Total Shareholders Funds 144,600.98
Mar-16 Mar-17 Mar-18 Mar-19
0.68 0.71 0.69 0.67
0.94687112055 0.95378717529 0.95038082691 0.94128704662871
0.32140966941 0.34025440395 0.35781365271 0.38724928934028
0.41982739386 0.37744676026 0.35221793076 0.44012577360214
1.11417153693 1.10948915259 1.24737409396 1.22684862079914
0.09736064639 0.09647588817 0.10313774597 0.1316097068587

0.208142427813 0.230377479714 0.2347520829 0.243736259164586

17,891.23 19,945.25 26,710.21

1.61617300877
23,598.85 25,215.51 28,892.48 39,954.03 547,671.40
16,139.93 17,899.98 19,945.26 26,715.79
24,922.98 26,437.25 30,400.95 42,446.17 338869.29
1,324.13 1,221.74 1,508.47 2,492.14
77,542.72 77,698.48 84,963.08 109,609.42
184,701.43 205,852.82 241,223.04 249,041.13
165,774.68 185,538.38 193,384.68 202,992.55
1.50404799205
392,075.02

260679.86
RELATIVE VALUATION

P/E ratio ONGC


MPS 123.6
EPS 26.94
P/E 4.58797327394209

PEG ratio ONGC


g 6.80
P/E 4.58797327394209
PEG 0.674701952050308
Decision Undervalued

Average P/E ratio 10.7239652563791

Current EPS of ONGC 26.94


Average PE of comparable firms 10.7239652563791
Price per share 288.903624006854

Price to Sales Ratio


P/S NPM*(1+g)*(1-b)/(r-g)
RELATIVE VALUATION

PETRO NET OIL INDIA


246 146.45
14.87 29.86
16.5433759246806 4.9045545880777

PETRO NET OIL INDIA


6.8 6.8
16.5433759246806 4.9045545880777
2.43284940068832 0.721258027658485 less than 1 undervalued
Overvalued Undervalued
market price is 125
here 288
more than 1 overvalued

mps

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