This document discusses the oil industry, price fluctuations, and HPCL's strategies and financial analysis. It notes that the oil industry contributes 15% to India's GDP and that HPCL employs over 11,000 people. It also summarizes that OPEC has cut oil production while prices have decreased from $58 to $42 per barrel due to high supply. The document analyzes HPCL's financial ratios from 2011-2015 and notes its strategies include capital investments of 31,570 crore and maintaining fuel supplies during the oil crisis.

1. HPCL- Growth, Scarcity and Global Imbalance of Oil
Industry
Group 1
Vijayshri Sharma
Prajakta Tambekar
Debanjan Bose
Princy Bhandhari
Souvik Dey

2. 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.

3. 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.

4. 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.

5. Price
Fluctuations

6. 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

7. 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.

8. 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

9. 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

10. Graphical
Approach
-5
0
5
10
15
20
25
30
35
2011-12 2012-13 2013-14 2014-15 2015-16
Ratios
ROE ROC ROTA Fixed asset turnover Working Capital Turnover

11.  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

12. 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

13. • 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