Energy information provider Platts today came out with its top 250 global energy company rankings. Indian public sector coal major, Coal India took second rank in Platts' list.
A total of 13 Indian companies made it to the list. Reliance and ONGC dropped a few places, but remained in the top 25. Platts ranked listed energy firms on the basis of their financial performance in 2010.
In an exclusive conversation on CNBC-TV18 Vandana Hari, editorial director at Platts spoke on the global energy company's rankings. Below is the edited transcript of the interview.
Q: If you look at the list there were a couple of surprises with ONGC and RIL slipping in the ranks, would you agree?
A: I won’t really call them surprises. A lot of factors are observed that lead to either the companies somewhat rising or falling in ranks. I think one of the questions we have been asked is why ONGC and Reliance slipped a little bit in their ranks. I wouldn’t put too much emphasis or importance to it because the bottom-line is Reliance Industries and ONGC still remain very firmly entrenched in the top 25 global energy companies, so that’s the most important thing.
Ranking is done on the basis of the companies’ asset base, revenues, profits and return on investment. I was just looking a little while ago as to why Reliance slipped and what I noted was while the asset base and revenues for Reliance definitely grew in 2010 compared with 2009, their profits and their return on investment went down a bit. So some of the other companies that rose up in ranks and went ahead Reliance (some Chinese, Russian and global oil majors) actually did much better on all those four fronts.
In the case of ONGC, the assets grew, so did the revenues and the profits, but the return on investment was a little bit lower.
Q: Another big surprise that really came up for us was the rise in ranking for HPCL and IOC especially when these two oil marketing companies actually survive on the subsidy bills from the government?
A: When you calculate profits, whatever they get as compensation form the government gets counted as the company’s revenue. What also needs to be kept in mind is that state-owned refiners like HPCL, IOC and BPCL could do much better if they weren't shackled by fuel subsidies. These companies have a very large growing captive oil market.
Whereas, there are a lot of other oil companies globally which do not have these benefits—they are struggling to find markets. Refiners in Europe have been very much down on their luck for over two years. So that's one benefit that the Indian companies enjoy. The revenue base is pretty strong and it's growing.
The second thing is that these companies are now benefitting from the removal of subsides on gasoline. Now that hasn't completely alleviated the losses because there are still losses incurred on diesel and LPG, but to a large extent, I think that's what gives the companies a leg up.
Coal India stock price
On December 01, 2015, at 13:16 hrs Coal India was quoting at Rs 336.95, up Rs 6.25, or 1.89 percent. The 52-week high of the share was Rs 447.25 and the 52-week low was Rs 300.75.
The company's trailing 12-month (TTM) EPS was at Rs 19.07 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 17.67. The latest book value of the company is Rs 26.49 per share. At current value, the price-to-book value of the company is 12.72.
READ MORE ON top 250 global energy companies, Platts, Coal India, Reliance, ONGC, Vandana Hari, HPCL, IOC
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