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Cairn India Ltd. Key Financial Ratios

NSE:CAIRN | OIL EXPLORATION/PRODUCTION

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Profitability Margins

2-year trend showing gross, operating, and net profit margins

FY 2015 - FY 2016

Understanding Profitability Margins

In FY 2016, Cairn India Ltd. posted a gross margin of 46.1%, an operating margin of 3.0%. Gross Margin = (Revenue - COGS) / Revenue; Operating Margin = EBIT / Revenue; Net Margin = Net Income / Revenue. Typical healthy ranges: Gross 20-40%, Operating 10-20%, Net 5-10%+. Consistent or improving margins indicate strong competitive positioning.

Company Performance

2-year trend showing revenue, gross profit, and net profit

FY 2015 - FY 2016

Cairn India Ltd.'s revenue declined 41.1% to 86.26B in FY2016, with net losses deepening 310.6% to -94.32B.

Understanding Company Performance

In FY 2016, Cairn India Ltd.'s revenue declined by 41.1% year-over-year. Revenue is total income from operations. Gross Profit is revenue minus cost of goods. Net Profit is the bottom line after all expenses. Consistent growth across all three signals a healthy, expanding business.

Return on Equity (ROE)

2-year trend showing shareholder returns

FY 2015 - FY 2016

Cairn India Ltd.'s ROE of -19.3% in FY2016 indicates negative returns — the company is destroying shareholder value.

Understanding Return on Equity (ROE)

In FY 2016, Cairn India Ltd. reported an ROE of -19.3%. ROE = (Net Income / Shareholders' Equity) x 100. Measures how efficiently the company turns equity into profit. Above 15% is generally strong; above 25% is excellent. Very high ROE may signal high leverage — check alongside debt levels.

Net Income vs Free Cash Flow

2-year trend comparing profitability with cash generation

FY 2015 - FY 2016

Cairn India Ltd. reported a net loss but generated positive free cash flow in FY2016, suggesting operational cash generation despite accounting losses.

Understanding Net Income vs Free Cash Flow

In FY 2016, Cairn India Ltd.'s free cash flow exceeded net income. Free Cash Flow = Operating Cash Flow - Capital Expenditure. When FCF exceeds net income, it suggests high-quality, cash-backed earnings. Persistent gaps may indicate aggressive accounting or heavy capex needs.

Net Income vs Operating Cash Flow

2-year trend comparing profitability with cash from operations

FY 2015 - FY 2016

Cairn India Ltd. reported a net loss but generated positive operating cash flow in FY2016, suggesting core operations remain cash-positive despite accounting losses.

Understanding Net Income vs Operating Cash Flow

In FY 2016, Cairn India Ltd.'s operating cash flow exceeded net income. Operating Cash Flow is the actual cash from core operations. OCF exceeding net income signals strong cash collection. OCF trailing net income may indicate aggressive revenue recognition or working capital issues.

Leverage Ratios

Measure a company's financial leverage, liquidity, and ability to meet financial obligations.

Current Ratio Analysis

2-year trend showing short-term liquidity position

FY 2015 - FY 2016

Cairn India Ltd.'s current ratio of 6.16x in FY2016 indicates excessively high liquidity that may signal inefficient asset management.

Understanding Current Ratio

In FY 2016, Cairn India Ltd. reported a current ratio of 6.16. Current Ratio = Current Assets / Current Liabilities. Measures short-term liquidity. A ratio of 1.5-3.0 is generally healthy; below 1.0 signals liquidity risk; above 3.0 may indicate underutilized assets.

Interest Coverage Ratio Analysis

2-year trend showing ability to service debt

FY 2015 - FY 2016

Cairn India Ltd.'s interest coverage ratio of 9.6x in FY2016 indicates comfortable debt servicing capacity.

Understanding Interest Coverage Ratio

In FY 2016, Cairn India Ltd. reported an interest coverage ratio of 9.6x. Interest Coverage = EBIT / Interest Expense. Shows how many times operating profit covers interest payments. Above 5x is comfortable; below 1.5x signals potential difficulty servicing debt.

Debt-to-Equity Ratio Analysis

2-year trend showing financial leverage and capital structure

FY 2015 - FY 2016

Understanding Debt-to-Equity Ratio

Debt-to-Equity = Total Debt / Total Equity. Below 1.0 is conservative; 1.0-2.0 is moderate; above 2.0 indicates higher financial risk. Capital-intensive industries naturally carry higher ratios.

Total Debt Analysis

2-year trend showing total debt with year-over-year changes

FY 2015 - FY 2016

Understanding Total Debt

Total Debt includes short-term debt, long-term loans, debentures, and capital leases. YoY changes (shown as percentages) reveal whether the company is leveraging up or deleveraging.

Shares Outstanding

Year-over-year change in diluted shares outstanding

Cairn India Ltd.'s diluted shares decreased 0.2% YoY in FY2016, indicating shareholder-friendly buybacks.

Over 2 years (FY2015–FY2016), diluted shares decreased 0.2% from 1.88B to 1.88B, reflecting long-term shareholder value creation.

Understanding Shares Outstanding

In FY 2016, Cairn India Ltd.'s diluted shares decreased by 0.2% year-over-year. Diluted Shares accounts for stock options, warrants, and convertibles. Positive YoY change means dilution (red); negative means buybacks (green). Consistent dilution above 5% annually is a red flag.

Data from audited consolidated filings. For educational purposes only — not investment advice. Last update: FY 2016