GICS Industry: Oil, Gas & Consumable Fuels l Sub Industry: Oil & Gas Refining & Marketing l Website: www.tidewaterindia.com
Tide Water Oil Company (India) Ltd
Key Stock Indicators
NSE Ticker:
Bloomberg Ticker:
Face value / Share:
Div. Yield (%):
TIDEWATER
TWO:IN
10.0
0.7
CMP (as on 19 Apr 2011—Rs/share):
52-week range up to 19 Apr 2011 (Rs) (H/L):
Market Cap as on 19 Apr 2011 (Rs mn):
Enterprise Value as on 19 Apr 2011 (Rs mn):
Div. Yield (%):
0.0
7,021.7
10,710.00/4,999.00
6,117
5,914
Shares outstanding (mn):
Free Float (%):
Average daily volumes (12 months):
Beta (2 year):
Tide Water Oil Company (India) Limited (TWOCL), a Kolkata based company was incorporated in
1928. It is a part of the Andrew Yule group. TWOCL is in the business of manufacturing automotive
and industrial lubricants. Its products include engine oil, gear and transmission oil, coolant and
greases for automobiles and industries. For industrial application it manufactures industrial oils,
greases and speciality products like metal working fluids, quenching oils and heat transfer oils. It
has five plants at Howrah, Oragadam, Turbhe, Silvassa and Faridabad.
KEY HIGHLIGHTS
Diversified interest into power generation
TWOCL has been in the business of manufacturing automotive and industrial lubricants. During
FY10, the company has started a new line of business of selling wind Power to Tamil Nadu
Electricity Board (TNEB). Two power generation units of 1.5 MW each have been set up at
Sankenari, Tamil Nadu, incurring capital expenditure of Rs 174.2 mn. These plants have been
commissioned and connected to TNEB grid. The company has an agreement with Suzlon Energy
Ltd. for operation and maintenance of these power units. The company generated and sold 82,933
kwh. of wind power during FY10. Apart from this the company has increased manufacturing
capacity of the oil segment from 87.198 million (mn) liters per annum to 92.5 mn liters per annum
and grease segment manufacturing capacity from 4.37 mn kgs per annum to 5.3 mn kgs per annum
during FY10.
0.9
73.8
6,543
0.7
Key Financial Indicators
Revenue (Rs mn)
EBITDA ma rgi ns (%)
PAT (Rs mn)
PAT ma rgi ns (%)
Gea ri ng (x)
EPS (Rs /s ha re)
PE (x)
P/BV (x)
RoCE (%)
RoE (%)
EV/EBITDA (x)
Mar-08
4,290.5
7.8
231.8
5.4
0.2
266.0
13.7
2.6
26.6
20.4
9.2
Mar-09
5,297.6
9.1
275.5
5.2
0.2
316.7
10.1
1.9
32.0
20.3
5.2
Mar-10
6,526.3
14.2
577.9
8.9
0.1
664.3
10.6
3.0
44.5
33.1
6.4
n.m. : Not meaningful
Shareholding (As on December 31, 2010)
Others
60%
Owns several brands in lubricant
TWOCL owns and markets its products under the brand VEEDOL. The brand has been established
and accepted in the industry for its quality and variety. The company also has technical
collaboration agreement with Nippon Oil Corporation (formerly Mitsubishi Oil Co. Ltd.) and
products manufactured under this collaboration, are marketed under the brand ENEOS. The
company’s products are distributed and supported by extensive network of distributors, dealers
and consignment depots across the country. The company also owns various other sub-brands such
as Prima, Turbo and Take Off, which have also been able to create a better market value for their
quality.
DII
14%
Promoter
26%
KEY RISKS
Indexed price chart
• Volatile prices of key raw materials such as, base oils, additives, grease etc.
• Intense competition from other organised players in the market
Stock Performances vis-à-vis market
Returns (%)
YTD
1-m
3-m
12-m
TIDEWATER
42
13
-7
33
NIFTY
10
7
3
10
Note:
1) YTD returns are since Apr 01, 2010 to Apr 19, 2011.
2) 1-m, 3-m and 12-m returns are up to Apr 19, 2011
CRISIL COMPANY REPORT | 1
Tide Water Oil Company (India) Ltd
BACKGROUND
TWOCL, a Kolkata based company was incorporated in 1928. It is a part of the Andrew Yule group. TWOCL manufactures and sells engine lubricants for the automotive and
industrial applications in India. Its automotive products include engine oils for trucks, tractors, commercial vehicles, passenger cars and two/three wheelers. It also
produces gear oil, transmission oil, coolant and greases for automobiles. For industrial application, it manufactures industrial oils, greases and speciality products like metal
working fluids, quenching oils and heat transfer oils. Tide water has tie-ups with a number of renowned Original Equipment Manufacturers (OEMs) in the automotive and
industrial equipment segment for manufacture of genuine oils. The company also has technical collaboration with JX Nippon Oil & Energy Corporation, the petroleum
conglomerate in Japan. It markets its products under VEEDOL and ENEOS brand names.
TWOCL has 5 manufacturing plants, located at Faridabad, Howrah, Silvassa, Turbhe and Oragadam with total manufacturing capacity of 92.5 mn liters of oil per annum and
5.3 mn kgs. of grease per annum. The company has also established two windmills at Tamil Nadu with a total capacity of 3 MW for generation of renewable energy.
COMPETITIVE POSITION
Peer Comparison
Revenue (Rs mn)
EBITDA ma rgi ns (%)
PAT (Rs mn)
PAT ma rgi ns (%)
Gea ri ng (x)
EPS (Rs /s ha re)
PE (x)
P/BV (x)
RoCE (%)
RoE (%)
EV/EBITDA (x)
Tide Water Oil Co.
(India) Ltd.
Mar-10
6,526.3
14.2
577.9
8.9
0.1
664.3
10.6
3.0
44.5
33.1
6.4
Castrol (India)
Ltd.
Dec-09
24,078.6
25.5
3,810.6
15.8
30.8
15.6
12.0
128.4
78.7
8.8
Gulf Oil Corpn.
Ltd.
Apr-50
9,811.8
6.7
450.7
4.6
1.2
2.5
34.1
2.3
5.6
17.5
16.1
n.m: Not meaningful
FINANCIAL PROFILE
Significant growth in top-line as well as bottom-line, margins also expanded during
FY10
Key Financial Indicators
Units
Revenue
Rs mi ll ion
Top-line of the company jumped from Rs 5.2 bn in FY09 to Rs 6.5 bn in FY10, an
increase of 23%, mainly on account of higher sales volume in the lubricants segment.
Sales volume in oil segment increased from 47.8 mn ltrs in FY09 to 59.7 mn ltrs in
FY10. Sales volume in grease segment increased from 6.3 mn kgs in FY09 to 7.7 mn
kgs. in FY10 due to revival in the automobile sector coupled with commencement of
wind power generation in FY10.
EBITDA ma rgins Per cent
Operating margins increased by 500 basis points, from 9.1% in FY09 to 14.2% in
FY10, mainly on account of lower cost of raw material and lower employee cost.
Bottom-line increased at a CAGR of 58% from FY08 to FY10. Net profits increased
from Rs 275.5 mn in FY09 to Rs 577.9 mn in FY10, mainly on account of higher
operating profits, which grew by 91% in FY10 over the last year coupled with lower
interest expenses and increase in other non-operating income (profits on forex
fluctuation).
PAT
Rs mi ll ion
PAT ma rgins
Per cent
Mar-08
Mar-09
Mar-10
4,290.5
5,297.6
6,526.3
7.8
9.1
14.2
231.8
275.5
577.9
5.4
5.2
8.9
Revenue growth Per cent
19.2
23.5
23.2
EBITDA growth
Per cent
89.0
43.7
91.4
PAT growth
Per cent
188.1
18.9
109.8
Gea ring
Times
0.2
0.2
0.1
RoCE
Per cent
26.6
32.0
44.5
RoE
Per cent
20.4
20.3
33.1
INDUSTRY PROFILE
Lubricants
Lubricant demand has recorded a CAGR of around 5 per cent over the past 5 years, due to high growth in the automobile and industrial sectors, resulting in high primary
demand. In the lubricants industry, the top four players hold over 90 per cent market share, which has resulted in a high level of concentration in the industry. The margins
of companies have also been comfortable, barring a few occasions when raw material price movements have been volatile. Operating profits of the players has been
consistently rising due to significant pricing power and strong marketing network. The industry is facing a threat from improved engine and lubricant technology, which has
led to lower replacement demand for lubricants and longer drain cycles.
In 2009-10, the prices of key raw materials, base oils and additives declined due to lower crude oil prices. However, players were able to improve their realisations by
raising the prices of lubricants thereby enjoying higher margins.
CRISIL COMPANY REPORT | 2
Tide Water Oil Company (India) Ltd
ANNUAL RESULTS
Income Statement
(Rs million )
Net Sales
Operating Income
Mar-08
4,284.0
4,290.5
Mar-09
5,290.5
5,297.6
Mar-10
6,513.7
6,526.3
EBITDA
EBITDA Margin
336.0
7.8
482.7
9.1
923.9
14.2
Depreciation
Interest
Other Income
25.0
10.7
12.9
33.9
49.0
11.4
61.8
12.6
16.1
353.1
231.8
457.8
275.5
893.3
577.9
PAT Margin
5.4
5.2
8.9
No. of shares (Mn No.)
0.9
0.9
0.9
266.0
316.7
664.3
Mar-08
313.1
-127.6
25.0
-82.5
Mar-09
411.2
-177.5
33.9
82.7
Mar-10
865.6
-287.1
61.8
-279.9
128.0
-93.0
0.0
350.3
-179.3
0.0
360.4
-420.7
0.0
PBT
PAT
Earnings per share (EPS)
Cash flow
(Rs million )
Pre-tax profit
Total tax paid
Depreciation
Change in working capital
Balance sheet
(Rs million )
Equity share capital
Reserves and surplus
Tangible net worth
Deferred tax liablity:|asset|
Long-term debt
Short-term-debt
Total debt
Current liabilities
Total provisions
Total liabilities
Gross block
Net fixed assets
Investments
Current assets
Receivables
Inventories
Cash
Total assets
Mar-08
8.7
1,226.5
1,235.2
-6.8
0.0
59.5
59.5
711.4
34.1
2,033.4
515.9
245.3
40.8
1,747.3
362.3
947.9
158.8
2,033.4
Mar-09
8.7
1,469.3
1,478.0
-2.0
0.0
29.9
29.9
769.0
101.4
2,376.3
617.9
388.6
40.8
1,946.9
421.7
744.1
316.2
2,376.3
Mar-10
8.7
2,003.0
2,011.7
26.3
0.0
0.0
0.0
936.7
91.9
3,066.6
1,086.6
754.1
40.8
2,271.7
539.1
1,301.3
202.9
3,066.6
Revenue growth (%)
EBITDA growth(%)
PAT growth(%)
Mar-08
19.2
89.0
188.1
Mar-09
23.5
43.7
18.9
Mar-10
23.2
91.4
109.8
EBITDA margins(%)
Tax rate (%)
PAT margins (%)
7.8
36.1
5.4
9.1
38.8
5.2
14.2
32.1
8.9
7.5
20.0
1,417.8
20.4
26.6
9.5
30.0
1,698.9
20.3
32.0
7.5
50.1
2,312.3
33.1
44.5
0.2
31.3
0.2
0.2
9.9
0.1
0.1
73.3
0.0
8.9
2.0
9.3
1.9
7.7
1.9
149
134
127
Ratio
Cash flow from operating activities
Capital Expenditure
Investments and others
Cash flow from investing activities
Equity raised/(repaid)
Debt raised/(repaid)
Dividend (incl. tax)
Others (incl extraordinaries)
-93.0
0.0
-83.1
-20.4
40.1
-179.3
0.0
-29.6
-30.5
46.5
-420.7
0.0
-29.9
-50.8
27.7
Cash flow from financing activities
Change in cash position
Opening cash
-63.4
-28.4
187.2
-13.6
157.4
158.8
-53.0
-113.3
316.2
Closing cash
158.8
316.2
202.9
Dividend payout (%)
Dividend per share (Rs)
BV (Rs)
Return on Equity (%)
Return on capital employed (%)
Gearing (x)
Interest coverage (x)
Debt/EBITDA (x)
Asset turnover (x)
Current ratio (x)
Gross current assets (days)
n.m : Not meaningful;
QUARTERLY RESULTS
Profit and loss account
(Rs million)
No of Months
Revenue
Dec-10
% of Rev
3
Dec-09 % of Rev
3
Sep-10
% of Rev
3
Dec-10
% of Rev
9
Dec-09
% of Rev
9
1,923.8
100.0
1,703.5
100.0
1,605.1
100.0
5,498.7
100.0
4,868.6
100.0
248.0
12.9
239.9
14.1
190.7
11.9
715.6
13.0
704.5
14.5
2.1
0.1
1.8
0.1
2.0
0.1
6.0
0.1
6.4
0.1
24.4
1.3
18.0
1.1
25.1
1.6
72.4
1.3
39.1
0.8
PBT
221.5
11.5
220.1
12.9
163.6
10.2
637.2
11.6
659.0
13.5
PAT
142.7
7.4
145.1
8.5
93.6
5.8
405.2
7.4
434.0
8.9
EBITDA
Interes t
Depreci a ti on
CRISIL COMPANY REPORT | 3
Tide Water Oil Company (India) Ltd
FOCUS CHARTS & TABLES
Shareholding Pattern (Per cent)
Mar 2010
Jun 2010
Promoter
26.2
26.2
FII
DII
14.3
14.3
Others
59.5
59.5
Sep 2010
26.2
14.3
59.5
Dec 2010
26.2
14.3
59.5
Board of Directors
Director Name
K. Datta (Mr.)
R.N.Ghosal (Mr.)
I. Sengupta (Mr.)
S. Das (Mr.)
A. Mukherjee (Mr.)
Designation
Chairman
Executive Director
Non-Executive Dire ctor
Non-Executive & Independent Director
Non-Executive & Independent Director
Ved Prakash ( Mr.)
Non-Executive & Independent Director
Additional Disclosure
This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT).
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CRISIL COMPANY REPORT | 4