Hindustan Petroleum Corporation Limited · NSE:HINDPETRO
Hindustan Petroleum — Investor Day (May 2018)
43 slides from Hindustan Petroleum's investor day presentation, May 28, 2018
Slide 1: Investors and Analysts Meet
Investors and Analysts Meet “Enhancing Stakeholder Value” 28th May 2018 Mumbai Delivering Happiness 1
Slide 2: Disclaimer
Disclaimer The information contained in this material have been obtained from sources believed to be reliable, but no representation or warranty express or implied, is made that such information is accurate or complete and it should not be relied upon as such. The information contained in this mater
Slide 3: Origin of HPCL
Origin of HPCL 1979 1978 1974 Merger of 1969 Merger of Kosan Gas Company 1962 Amalgamation Caltex undertaking into HPCL 1955 Commissi- of ESSO and Lube India to in India into HPCL 1952 StanVac oning of Lube India form HPCL operations Ltd. Incorp. of taken over Caltex Oil by ESSO Incorp. of Refinery
Slide 4: Global Rankings & Ratings
Global Rankings & Ratings Rankings # 384 # 48 Ratings Upgraded from Baa3 during 2017-18 BBB- (Stable) Baa2 (Stable) 4
Slide 5: Business Portfolio
Business Portfolio • Mumbai: Fuels (7.5 MMTPA) & Lubes (428 TMTPA) Refinery • Visakh: Fuels (8.3 MMTPA) Refinery Refining • Green R&D Centre, Bengaluru Retail 15.8 MMTPA LPG Direct Sales E&P Marketing Lubes 7 Blocks# 36.9 MMT* Aviation Natural Gas • Operating thru M/s Prize Petroleum, a Renewables w
Slide 6: HPCL supply infrastructure
HPCL supply infrastructure Terminals / TOPs Depots* LPG Plants ASFs 41 68 48 41 Description As of 31.03.2018 Lube Blending Plants POL Tankage 3.9 MMT LPG bottling capacity 4.7 MMTPA Lube blending capacity 305 TMTPA QC Labs 45 Nos. 6 Strategically located State-of-Art Infrastructure with robust techn
Slide 7: POL Pipelines network of HPCL
POL Pipelines network of HPCL Note: Following 2 operational P/ls are not shown in map LPG Pipeline 1. Bathinda – Ramanmandi P/L (30 Kms; 2.1 MMTPA) Liquid POL Pipeline 2. Bahadurgarh - Tikrikalan P/L (14 Kms – 2 spurs; 0.75 MMTPA) Ramanmandi – Bahadurgarh P/L Bathinda Refinery 4 243 Kms; 4.7 MMTPA B
Slide 8: 2017-18 Performance
2017-18 Performance Highest ever Market Sales : 36.9 MMT Sales Growth : 4.7% Highest ever Refining Thruput : 18.3 MMT Highest ever Pipeline Thruput : 20.4 MMT India’s No.1 Lube Marketer : 603 TMT Highest Ever Profit after Tax of Rs. 6,357 crore 8
Slide 9: 2017-18: Key Performance Highlights
2017-18 : Key Performance Highlights Increase in PAT for the fifth consecutive year Domestic Sales Growth: 4.4% Highest ever Production: MS - 3.34 MMT; HSD - 7.30 MMT Lube Oil Base Stock - 439 TMT Highest ever combined GRM : US$ 7.40/bbl Lowest ever specific energy consumption by refineries : EII of
Slide 10: Performance over the years
Performance over the years Crude Thruput (MMT) 40 Sales (MMT) 7,000 36.9 PAT (Rs. Crore) 35.2 35 34.2 6,357 6,000 32.0 6,209 31.0 30 5,000 (Rs. Crore) 25 (MMT) 3,726 4,000 20 17.8 18.3 17.2 15.5 16.2 3,000 15 2,733 1,734 2,000 10 1,000 5 0 0 2013-14 2014-15 2015-16 2016-17 2017-18 (Note: PAT from 20
Slide 11: Financial Performance trend
Financial Performance trend Profit after Tax (Rs Crore) 6,209 6,357 3,726 2,733 1,734 2013-14 2014-15 2015-16 2016-17 2017-18 Net Worth (Rs Crore) 23,948 20,347 16,022 17,970 15,012 2013-14 2014-15 2015-16 2016-17 2017-18 11
Slide 12: Return on Capital Employed %
Return on Capital Employed % ROCE % 27.67 26.94 19.00 20.18 11.16 Mar 2014 Mar 2015 Mar 2016 Mar 2017 Mar 2018 ROCE % 11.16 19.00 20.18 27.67 26.94 ROE % 11.55 17.06 20.74 30.51 26.55 Interest Coverage 2.96 6.88 9.96 17.84 17.24 (Times) EBDITA to 2.64 3.15 4.59 5.66 5.15 Turnover % All Financial par
Slide 13: Total Debt - Equity Ratio
Total Debt - Equity Ratio Total Debt - Equity Ratio 2.14 1.27 1.18 1.04 0.88 Mar 2014 Mar 2015 Mar 2016 Mar 2017 Mar 2018 (Rs. crore) Short term 16,377 2,200 3,887 10,891 10,762 Long term 15,789 18,135 17,280 10,357 10,229 Total 32,166 20,335 21,167 21,250 20,991 Borrowings Net Worth 15,012 16,022 1
Slide 14: Return to Share holders
Return to Share holders 2016-17 Total Dividend Rs. 30/Share May 2017 Bonus Issue (Recom.) 1:2 Feb 2018 1st Interim Dividend Rs. 14.5/Share May 2018 Final Dividend* Rs 2.50/Share * Subject to approval of final dividend in AGM. 14
Slide 15: Financial Performance trend
Financial Performance trend Earnings per share (Rs/Share) 40.7 41.7 24.5 17.9 11.4 2013-14 2014-15 2015-16 2016-17 2017-18 (Equivalent EPS taken for the year 2013-14 to 2016-17 basis No of Equity shares as on 31.03.2018) 15
Slide 16: Dividend Yield
Dividend Yield Dividend Yield (% of Market Price) 5.7 5.0 4.9 4.4 3.8 2013-14 2014-15 2015-16 2016-17 2017-18 * Subject to approval of final dividend in AGM. * Dividend yield of BSE Sensex is 1.56% 16
Slide 17: Consolidated Net Profit
Consolidated Net Profit 8,236 Consolidated PAT 7,218 (Rs. Crores) 4,675 1,499 1,080 2013-14 2014-15 2015-16 2016-17 2017-18 Consolidated Net Profit of over Rs. 7,000 crore for the second consecutive year 17
Slide 18: Market Capitalisation
Market Capitalisation HPCL Market Cap at BSE (Rs crore) 53,380 52,442 26,601 22,014 10,489 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 2014 2015 2016 2017 2018 Five fold increase in Market capitalization during last 4 years 18
Slide 19: What drives the performance....
What drives the performance…. 19
Slide 20: HPCL is uniquely positioned to leverage the opportunity
HPCL is uniquely positioned to leverage the opportunity ▪ Highest Market Sales Growth among Industry in the last decade ▪ Major brown and green field expansion plans for refineries ▪ No.1 Company in total lubricant sales and owning India’s Largest lube oil refinery ▪ 2nd Largest Product cross countr
Slide 21: Refining
Refining Refineries in West Coast, East Coast & North Refinery Throughput (MMT) HMEL Bathinda 27.9 28.3 27.2 Refinery (JVC) 10.7 10.5 8.9 HMEL 17.2 HPCL 17.8 18.3 2015-16 2016-17 2017-18 Mumbai Specific Energy Consumption (MBN) Refinery with LOUP Visakh Refinery Mangalore 86.4 Refinery Stake in HMEL
Slide 22: Key features of Refineries
Key features of Refineries • Coastal Refineries – on East & West coasts • BS IV Production facilities for MS & HSD • Largest Lube Refinery accounting for ~ 40% of India’s total Lube production Mumbai Refinery • 2nd highest Bitumen Production in the country • SPM at Visakh Refinery for discharging VL
Slide 23: Profit improvement initiatives
Profit improvement initiatives • Bottom of the barrel Upgradation HPCL GRM in $/bbl. • Maximising value added products like Bitumen & Lubes • Energy Efficiency Improvement 6.7 7.4 6.2 • Reliability Improvement • Switch over to Natural gas / Open access 2015-16 2016-17 2017-18 power purchase to reduc
Slide 24: Marketing: Touching lives Everyday
Marketing : Touching lives Everyday Customer touch points Market Sales ▪ Retail outlets = 15,062 34.3 35.2 36.9 0.4 0.5 0.7 ▪ LPG Distributors = 4,849 ▪ SKO / LDO Dealerships = 1,638 33.9 34.7 36.2 ▪ CNG facilities at Retail outlets = 239 ▪ Lube Distributors = 266 2015-16 2016-17 2017-18 Exports Dom
Slide 25: Focussed Customer Engagement
Focussed Customer Engagement Retail (Transport Fuel) LPG Urban segment Domestic Commercial Upwardly mobile Humlog Industrial Gen Next Dependants Lubricants Walk-ins Driver Saheb Highway segment Rural segment Humrahi Fleet owners Khush-haal Kisaan Highway Raja Aviation Fuel Industrial & Consumer Air
Slide 26: Key initiatives
Key initiatives Fuel Retailing LPG • Modernization of ~1000 Retail outlets • First owned rail wagon rake for • Customer awareness program - HP transportation of LPG Hai Jahan Bharosa Hai Wahan • Agreement with Haldia LPG Import • Launch of Power 99 in 7 cities Terminal for next 20 years • EV chargin
Slide 27: Productivity enhancement at POL Locations
Productivity enhancement at POL Locations Bay Filling Rate TT Cycle Time 1200 75 LPM Minutes 944 900 845 53 715 50 47 43 600 25 300 0 0 15-16 16-17 17-18 15-16 16-17 16-17 SMART terminal initiative conceptualized and implementation initiated to improve productivity , Safety & efficiency through Auto
Slide 28: Talent Management
Talent Management 1 Samavesh – Structured Induction process to Learn, Grow and Lead 2 PACE - Performance Appreciation and Capability Enhancement 3 Capability Building – Behavioural / Functional and Technical training 4 Project Akshay , Periscope - Building Strong Leadership Pipeline Recognition – Re
Slide 29: CSR: Touching lives Every Way
CSR : Touching lives Every Way Focus Areas Child Care Environment & Community Education Development Beyond Business ….. Health Sports Care Skill Development Touching over 2.5 Lakh lives since inception 29
Slide 30: Leveraging Technology for empowering Customers
Leveraging Technology for empowering Customers Retail • Automation at 7,900 outlets • Cashless payment • Automation planned at 100% enablement (with at least 3 outlet network by Dec’18 digital modes) > 96% • Vehicle identification System • DT Plus Terminals across scaled up the entire network LPG On
Slide 31: Leveraging Technology for Supply Chain Management
Leveraging Technology for Supply Chain Management Pipelines • Pipeline Intrusion • Pipeline Integrity Management Detection System (PIDS) Software (PIMS) Pipeline Reliability & Security Maintenance Inventory Operations & Distribution Management Vehicle Tracking System Terminal Automation System • Bat
Slide 32: Oil & Gas: Demand Projections for India
Oil & Gas : Demand Projections for India India Oil & Gas Consumption Oil (MMT) 51 Gas (MMtoe) 55 Oil Gas CAGR % 24 32 218 155 2000- 2017 4.3% 4.6% 106 122 2000 2005 2010 2017 Demand Projections upto 2025 by various agencies Description Annual Growth • Huge demand potential for Oil & Domestic oil dem
Slide 33: Research and Development
Research and Development • Green R&D Centre at Bengaluru R&D Thrust Areas • R&D Centre at Vashi • Opportunity Crudes • Residue Up-gradation Infrastructure Development • New Process Developments • Catalyst Development Product / • Alternative Energies Collaborative Focus process Research Areas Develop
Slide 34: Natural Gas: End to End participation
Natural Gas : End to End participation 1 2 3 4 Marketing Sourcing & Regasification Pipeline liquefaction 5 Captive Building integrated end-to-end gas business Regasification • 5 MMTPA LNG Regasification Terminal at Chhara port, Gujarat Pipeline Infrastructure • GSPL India Transco Ltd (GITL) • Mallav
Slide 35: Leveraging opportunity in Petrochemicals
Leveraging opportunity in Petrochemicals Petrochemicals HPCL Plans in Petrochemicals ▪ Increasing Import dependence by ▪ Build Petrochemical complexes India due to Lack of investments • 9 MMTPA Refining-cum- Petrochemical complex at Strong Economic Growth Rajasthan • 1 MMTPA Petrochemical complex at
Slide 36: Project commissioned in 2017-18
Project commissioned in 2017-18 Marketing Refining 250 TMTPA LPG plant at Panagarh (WB) Tail Gas Treating Unit (TGTU) at MR New depot at Nalagarh in Himachal Pradesh Revamp of Solvent Extraction Unit (SEU)-II Furnace at MR Oil storage facilities with storage capacity of 8600 KL at Leh for Indian Arm
Slide 37: Panagarh LPG Plant
Panagarh LPG Plant Amongst India’s Largest LPG Plants 250 TMTPA LPG Bottling capacity 3 x 500 MT Mounded Storage Vessels 72 Head Flex-speed automatic Electronic Carousel 8 bay TT Gantry Plant area ~75 acres • Production rate of 4200 cylinder per hour on a single carousel Project Cost ~190.45 crore •
Slide 38: Infrastructure & Capacity Expansion Plans
Infrastructure & Capacity Expansion Plans Major Projects JVC Projects • Visakh Refinery Modernization project • 9 MMTPA HPCL Rajasthan Refinery Limited at Barmer in Rajasthan • Mumbai Refinery Expansion Project • Petrochemical Complex at Kakinada • Mundra Delhi Pipeline Phase II in Andhra Pradesh Ex
Slide 39: Capex & Investment Plan
Capex & Investment Plan Capital Expenditure (Rs. crore) 8425 7210 5595 5860 4855 2014-15 2015-16 2016-17 2017-18 2018-19 (Projected) (Rs. crore) 2018–2023 2018-19 Capex Projection (Estimated) (Proj.) Refining 31,400 3,891 Marketing 29,400 4,047 Renewables and R&D 1,300 88 Joint Venture 33,900 399 To
Slide 40: Awards and Accolades during 2017-18
Awards and Accolades during 2017-18 FIPI Awards SCOPE Meritorious Awards In the list of ‘Top 100 Global Energy ABP Brand excellence award Leaders’ by Thomson Reuters 40
Slide 41: Joint Ventures and Subsidiaries
Joint Ventures and Subsidiaries Refining LPG Storage Upstream Marketing Infrastructure Alternate Fuels HPCL Middle East FZCO City Gas Distribution Natural Gas Aavantika Gas Ltd. Growth through Partnerships 41
Slide 42: Functional Directors
Functional Directors Shri M K Surana, Chairman & Managing Director • He is a Mechanical Engineer with a Masters degree in Financial Management and has wide exposure in the Petroleum Industry spanning over 3 decades. He handled a wide range of responsibilities including leadership positions in Refine
Slide 43: Thank you
Thank you