it is relating to the changes & future prospects of energy sector

1. PRESENTATION ON ENERGY SECTOR

2. INDUSTRY STRUCTURE
 The Indian energy sector is classified into two main categories upstream and
downstream segments. The upstream energy segment comprises of exploration and
production of oil & gas. Downstream segment comprises of refining and marketing of oil
& gas. Upstream is dominated by mainly by ONGC and Oil India, while downstream is
dominated by IOC, BPCL and HPCL.
 The Indian economy has been steadily growing in the range of 7%-8% and has spurred
energy consumption at a Compound Annual Growth Rate (CAGR) of 5.3% over the last
two decades.
 Energy sector is one of the few industries that still remain under government control In
India. Due to the politically sensitive nature of the industry, the government still continues
to regulate oil prices in India.

3. IMPACT OF ENERGY SECTOR IN INDIAN
ECONOMY
 INDUSTRIES.
 TRANSPORT & TRADES.
 SERVICES.
 AGRICULTURE.

4. Top Players of the sector
Parameters Coal
India
Ra
nk
ONGC Ra
nk
Indian oil
cor.
Ra
nk
BPCL Ra
nk
GAIL Ra
nk
Market Value 363.00 4 306.45 5 370.60 3 804.20 1 384.80 2
Book Value 67.13 5 201.22 4 279.71 1 268.66 2 255.87 3
Face Value 10.00 1 5.00 2 10.00 1 10.00 1 10.00 1
EPS 22.01 5 29.17 3 23.06 4 51.36 1 34.31 2
Market Cap. 2,29,284 2 2,62,183 1 89,980 3 58,150 4 48,811 5
Sales 68,810.02 4 1,74,433.
18
3 4,94,528.33 1 2,64,406.
60
2 61,918.31 5
Net Profit 15098.90 2 26,341.4
3
1 5976.09 3 3935.45 5 4576.81 4
Total Assets 79813.83 2 2,56,438 1 17813.39 5 55,165.36 3 54,067.19 4
P/E Ratio 16.49 1 10.51 5 16.07 2 15.66 3 11.21 4
Dividend yield 7.99 1 3.10 2 2.47 4 2.19 5 2.70 3
Overall Ranking 1 2 3 4 5

5. WHAT AFFECTS THIS SECTOR
 Demand Demand or consumption growth of energy is mainly dependant on growth in gross domestic
product of a country and population. The demand for energy rises as the country's GDP increases and
vice versa. India's per capita energy consumption is 383 kg of Oil Equivalent (KGOE) as against the
world average of 1,737 KGOE, which indicates a significant potential for growth in the demand for
energy.
 Supply Oil & Gas being a fossil fuel; therefore supply depends on its availability in a particular region.
Demand exceeds supply in Indian energy sector. India imports 75% of its total oil consumption due to
low proven oil & gas reserves within the country.
 Expenses Industry expenses include raw material and employee costs for both upstream and down
stream segments. Downstream segments in particular also encounter high distribution and interest
expenses.

6. How To Value Energy Sector
 One can value energy companies on Price to Book Value ratio,
Enterprise Value to EBITDA ratio & Enterprise Value to Replacement
cost ratio due to cyclical & commodity nature of business.

7. Growth Drivers for the Energy Sector
 India’s energy demand growing at 3% per year.
 About 44% of reserves are onshore resources, while 56% are offshore. The
country’s natural gas pipeline network amounted to over 15,340 kms in
2013 and a proposed expansion of 30,000 kms is envisaged by 2018-19.
 The government is in the process of determining the structure of petroleum
contracts between the government and companies. The current system
includes a production-sharing mechanism, allowing producers to recover
exploration costs during production before sharing profits with the
government.
 The goverment has decided to set up strategic storage of 5.03 MMT(Million
Metric tons) of crude oil at 3 locations – Visakhapatnam, Mangalore and
Padur.

8. REASONS TO INVEST IN ENERGY
SECTORS
 India is the 2nd largest refiner in Asia.
 India is the 4th largest consumer of crude oil and petroleum products in the
world.
 Demand for primary energy in India is to increase threefold by 2035 to
1,516 Million Tonnes of Oil Equivalent from 563 Million Tonnes of Oil
Equivalent in 2012.
 Investments worth USD 70 Billion are expected across the oil and gas value
chain during 2012–17.
 Despite being a net importer of crude oil, India has become a net exporter
of petroleum products by investing in refineries designed for export,
particularly in Gujarat.

9. CONCLUSION
 Clearly, the Energy Sector is comprised of many different types of
companies from operating in different industries, to having entirely different
corporate and capital structures. Nevertheless, there is a lot of value to be
found in this sector even after the strong market environment that we’ve
had recently. However, it also needs to be considered that the Energy
Sector is also a sector that the market place tends to discount.

10. Presented by:
Vivek Rungta
Ravi Sah.