Indian Oil (NSE:IOC) ROIC % : 8.48% (As of Dec. 2023)

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What is Indian Oil ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Indian Oil's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 8.48%.

As of today (2024-05-01), Indian Oil's WACC % is 10.38%. Indian Oil's ROIC % is 9.45% (calculated using TTM income statement data). Indian Oil earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Indian Oil ROIC % Historical Data

The historical data trend for Indian Oil's ROIC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Indian Oil ROIC % Chart

Indian Oil Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

ROIC %

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6.19

0.83

6.34

7.26

4.79

Indian Oil Quarterly Data
	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Sep23	Dec23
ROIC %	Get a 7-Day Free Trial															0.12	1.72	16.10	13.34	8.48

Competitive Comparison of Indian Oil's ROIC %

For the Oil & Gas Refining & Marketing subindustry, Indian Oil's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Indian Oil's ROIC % Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, Indian Oil's ROIC % distribution charts can be found below:

* The bar in red indicates where Indian Oil's ROIC % falls into.

Indian Oil ROIC % Calculation

Indian Oil's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROIC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	259135.8 * ( 1 - 22.17% )	/	( (4068913.5	+	4347312)	/ 2 )
=	201685.39314	/	4208112.75
=	4.79 %

where

	Invested Capital		(A: Mar. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	4106248.5	-	497374.3	-	( 100147.6	-	max(0, 1928646.2	-	1468606.9	+	100147.6	))
=	4068913.5

	Invested Capital		(A: Mar. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	4417620.9	-	548237.3	-	( 124806.1	-	max(0, 2066583.3	-	1588654.9	+	124806.1	))
=	4347312

Indian Oil's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROIC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	487418 * ( 1 - 23.16% )	/	( (4415653.9	+	0)	/ 1 )
=	374531.9912	/	4415653.9
=	8.48 %

where

	Invested Capital		(Q: Sep. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	4576233.6	-	597968.1	-	( 177088.2	-	max(0, 2031023.8	-	1593635.4	+	177088.2	))
=	4415653.9

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	0	-	0	-	( 0	-	max(0, 0	-	0	+	0	))
=	0

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

Indian Oil (NSE:IOC) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Indian Oil's WACC % is 10.38%. Indian Oil's ROIC % is 9.45% (calculated using TTM income statement data).

Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Indian Oil ROIC % Related Terms

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Indian Oil (NSE:IOC) Business Description

Industry

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530965:India

Address

J.B. Tito Marg, 3079/3, Sadiq Nagar, New Delhi, IND, 110 049

Website

https://www.iocl.com

Indian Oil Corp Ltd conducts business across the energy value chain as India's national oil company. The Petroleum Products business generates the majority of the group's revenue. Indian Oil pursues exploration and production opportunities both domestically and internationally. Sale of Petrochemicals , Other operating segment of the Corporation comprises; Gas, Oil & Gas Exploration Activities, Explosives & Cryogenic Business and Wind Mill & Solar Power Generation. A network of pipelines in India not only transport oil from company fields but also to and from its refineries. The pipeline network spans across India and can move various petroleum products. The firm's refinery operations include a host of technologies for processing oil and gas to meet the needs of a diverse client base.