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As a major downstream player, with around 8% of India's refinery capacity under its belt, Nayara Energy is a vital participant in empowering India's energy security by satisfying the varied needs of its customers.
Growth in %
35.77%
1 Year
8.57%
4 Year
11.32%
6 Year
The company witnessed post-covid recovery and stupendous revenue growth of 35.5% year on year in FY22. This was achieved due to the continued expansion and increased efficiency of the retail network which remained fully operational throughout the year. Flexibility in accessing crude and the ability to export any supplied surplus to domestic requirements allowed the company to run at throughput levels much higher than the industry norms. The finance team worked endlessly to utilize the trickle-down effects of geopolitical turmoil with the supportive banking system. More than 40% of contractual revenues were contributed by its 6500+ retail outlets (pumps), while other domestic marketing companies made up 25% of the supply. Revenue from exports grew 113% y-o-y and furnished for 31% in FY22.
Growth in %
101.00%
1 Year
10.18%
3 Year
-5.35%
6 Year
Product margins remained subdued due to diminished demand in the initial quarters of FY22. Natural gas (NG) costs remained significantly higher due to external factors and liquefied natural gas (LNG) supply gap. The problem was compounded by higher crude costs and strong Brent-Dubai spreads. The company tackled each situation with strategic intervention. Incessant thrust on undisrupted business operations resulted in higher yield throughput, and supply optimization, which helped capture market opportunity in a volatile environment. An encouraging 99.9 per cent reliability was achieved through consistent focus and the company witnessed year-on-year supernormal PAT growth north of 100%.
Growth in %
101.30%
1 Year
12.49%
4 Year
-5.77%
6 Year
Growth in %
6.09%
1 Year
3.94%
3 Year
1.74%
6 Year
The company demonstrated in its ingenuity accomplishing its first gas resale transaction in the domestic market to monetize soaring gas prices. It successfully operationalized Nayara's international launchpad, a wholly owned subsidiary in Singapore. This brings a strong synergy to the Company's global trading and fund-raising endeavors. The company has consistently added to its book value by adding to retained earnings and effective cashflow hedge management. BVPS has increased 6% year on year in FY22 to ₹ 134.
Growth in %
40.76%
1 Year
-4.01%
3 Year
-4.27%
6 Year
The company succeeded in carefully unwinding refinery unit constraints to process tougher crude grades. Further, by optimizing gasoline, LPG and other higher-margin products, it was able to improve margins. The sale of solids also helped the Company benefit from increased pricing. The shift from Natural Gas to alternate fuels (naphtha and LPG) during the historically high spot LNG price turned out to be a timely measure that saved production costs. In FY22, EBIDTA margins remained stable even though gross profit margin decreased 7% year on year.
Growth in %
91.15%
1 Year
-7.26%
3 Year
-7.78%
6 Year
The company has always strived to deliver only top-quality products and service and build and strengthen its relationship with customers. New Product Introductions (NPI) of high-value products like Mineral Turpentine Oil (MTO) is a step in that direction in the domestic market. The company has now trained its lens on low Sulphur heavy stock (LSHS) and are confident about its value addition to the market segment. Such strategic expansion of its product portfolio to navigate the suboptimal profitability of conventional products and is a healthy reflection of the innovation quotient fostered within the Company. EBIT saw a 68.9% rebound to ₹ 3000+ Cr range in FY22.
Growth in %
6.21%
1 Year
2.92%
3 Year
-1.13%
6 Year
Assests grew 6.2% y-o-y in FY22 bolstered by receivables growth in H2.
Growth in %
-26.15%
1 Year
-15.50%
3 Year
-24.22%
6 Year
In FY22, the company laid the foundation stone for the petrochemical expansion project for the 450 KTPA Polypropylene Plant as a part of its backwards diversification strategy. The construction of the first phase will be complete in 2023. Fully tied-up project financing up to 4,016 crores from consortium banks. Thus, the net borrowings of the company have increased 16% to ₹20.5 kCr. The company also successfully raised ₹ 2285 Cr. through its maiden listed NCDs at competitive rates for refinancing existing NCDs.
The Company's aggressive domestic strategy to focus upon on-purpose and swing products to capture market share of high-margin molecules such as Light Diesel Oil (LDO) resulted in 4x higher sales than the business plan. With a targeted customer-market identification approach, Nayara's by-product realization remained the best amongst domestic refiners. Adding momentum to the company's green energy endeavours and its margins, the company has effectively maximized ethanol-blending to 7.16% in March 2022, with overall blending compliance of 4.96% in FY22. Efficient management of operations has led to a steady current ratio of 0.6 well above the industry average of 0.4
The company formulated a meticulous, multi-phase action plan to overcome severe stress on liquidity due to lower in the earlier quarters. Despite a challenging market environment and suppressed margins, Nayara Energy managed to secure prepayment deals worth more than $1 billion. FY22 saw growth in receivables as well as inventory, but growth in payables balanced the quick ratio to steady 0.3
In spite of increase in borrowings in FY22, boost in sales and rising operating margin ballooned up interest coverage ratio to 1.66
At the end of FY22 The company has more than 6,500+ operational outlets, has safely handled 5,000 vessels and 390 MMT of crude at the port, 5000+ Loss Time Injury (LTI) free days and have over 50 million Safe Man-hours. 9 new crude grades were introduced as the company's offering in crude basket grew to 126 grades. Operating margins recovered only marginally in FY22 owing to the lags in recovery particularly operational challenges in supply side. It is a credit to the remarkable operational efficiency and steadfast management of the company that it has come through this period relatively unscathed and been able to provide its customers with the essential products they needed throughout the pandemic.
The Ukrainian war's economic repercussions added tension to the already tight crude and product markets recovering from the pandemic. This has led to very positive refining margins for the company and the return margins have generally improved. ROE grew to 4.4% in FY22 at 3 years CAGR of 6%. The challenge is that retail prices in India have been kept below international prices and while lags are normal, this must be resolved to ensure the viability of the private sector and a level playing field for all participants.
