Confidence Petroleum Limited, a key player in the LPG and CNG cylinder manufacturing and LPG marketing sectors, has reported its financial results for the first quarter of the fiscal year 2023, ending June 30, 2022. The company's performance shows a mixed picture with significant revenue growth but a decline in profits compared to the same period last year.

Standalone Performance

On a standalone basis, Confidence Petroleum India Limited reported a profit of ₹1,281.00 lacs for the quarter ended June 30, 2022. This marks a decrease from the ₹1,878.00 lacs profit recorded in the corresponding quarter of the previous year. However, the company's revenue from operations saw a substantial increase, rising to ₹33,111.00 lacs from ₹20,647.00 lacs year-on-year, representing a growth of approximately 60%.

Consolidated Results

The consolidated financial results paint a similar picture. The company posted a consolidated profit of ₹1,445.00 lacs, down from ₹1,682.00 lacs in the previous year's quarter. However, the consolidated revenue showed robust growth, increasing to ₹35,531.00 lacs from ₹22,165.00 lacs, marking a significant year-on-year increase of about 60%.

Segment-wise Operations

Confidence Petroleum India Limited operates through two main segments:

1. Cylinder Division: Focused on the production and marketing of LPG/CNG cylinders.
2. LPG Division: Engaged in LPG marketing and bottling business.

Financial Metrics

The company's earnings per share (EPS) for the quarter stood at ₹0.45 on a standalone basis and ₹0.50 on a consolidated basis.

Audit Report

The statutory auditors have provided unmodified limited review reports on the quarterly results, indicating that the financial statements are free from material misstatements.

Performance Analysis

While Confidence Petroleum India Limited has shown impressive top-line growth with a substantial increase in revenue, both on standalone and consolidated bases, the bottom-line results have seen a decline. This scenario suggests that the company might be facing increased operational costs or other challenges that are impacting its profitability despite strong sales growth.

The divergence between revenue growth and profit decline could be attributed to various factors such as increased raw material costs, higher operational expenses, or market pressures.

As Confidence Petroleum India Limited continues to navigate the dynamic energy sector, stakeholders will be watching closely to see how the company addresses the challenges of maintaining profitability in the face of strong revenue growth.

Confidence Petroleum India Limited (CPIL) has released its financial results for the first quarter, revealing a mixed performance with revenue growth accompanied by profitability challenges.

Revenue Growth

CPIL reported a consolidated revenue from operations of ₹1,11,199.00 lakh for Q1, marking a significant increase from ₹77,793.00 lakh in the same quarter of the previous year. This represents a year-over-year growth of approximately 43%, indicating strong top-line performance.

Profitability Metrics

Despite the robust revenue growth, the company faced some headwinds in profitability:

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) decreased to ₹828.00 crore from ₹905.00 crore in the previous quarter.
• EBITDA margin compressed to 7.45% from 9.79% quarter-over-quarter.
• Consolidated net profit declined to ₹202.00 crore from ₹228.00 crore in the previous quarter.

Segment Performance

CPIL operates in two main segments:

1. Cylinder Division:

   • Revenue: ₹4,419.00 lakh
   • Segment Result: ₹354.00 lakh

2. LPG Division:

   • Revenue: ₹1,06,780.00 lakh
   • Segment Result: ₹7,927.00 lakh

The LPG Division continues to be the primary revenue driver for the company.

Financial Highlights

Strategic Developments

The company has made some strategic decisions:

1. CPIL has decided to discontinue its involvement in the planned LPG import terminal project at JNPA (Jawaharlal Nehru Port Authority).
2. The company will explore the development of smaller, more efficient terminal facilities.
3. CPIL remains committed to strengthening its presence in the domestic energy market through investments in high-growth retail verticals, bulk LPG supply to various industries, and small terminals in different geographical areas.

New Subsidiary

CPIL incorporated a wholly-owned subsidiary named Confidence Green Energy Private Limited, signaling potential expansion into green energy solutions.

Auditor's Observations

The company's auditors have noted two areas of concern:

1. A difference in the value of Input Tax Credit as per the company's books and the GST Network Portal.
2. Non-recognition of additional provident fund liability on revised basic wages, as per a Supreme Court ruling.

The management is working on reconciling these issues and seeking expert opinions where necessary.

In conclusion, while Confidence Petroleum India Limited has shown strong revenue growth, the company faces challenges in maintaining profitability margins. The strategic shift away from the large LPG import terminal project towards smaller, efficient facilities and the formation of a new green energy subsidiary indicate the company's efforts to adapt to market conditions and explore new growth opportunities in the energy sector.