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India Infoline News Service/
11:42 , Jul 06, 2012
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Refining margins have weakened on a sequential basis on the back of fall in gasoline and naphtha spreads.
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- Crude oil prices corrected by 8% during the quarter. However, with equivalent depreciation in the rupee, gross under recoveries are expected to be at Rs430bn a rise of Rs19bn on sequential basis. We expect upstream to contribute 33%, while government sharing at 33%
- Refining margins have weakened on a sequential basis on the back of fall in gasoline and naphtha spreads. For RIL, these losses will be offset by higher throughput on sequential basis as the refinery underwent a three week shutdown in Q4 FY12. Petrochemical spreads have been weak across categories resulting in lower integrated margins on qoq basis. Crude oil production from MA-1 field and gas production from KG-D6 field are likely to be lower on a qoq basis. Inventory losses will impact profitability of HPCL, BPCL, IOC and MRPL as net GRMs will be further low.
- Higher production from MBA fields along with rupee depreciation is expected to translate into strong revenue and profit growth for Cairn India. For ONGC and Oil India, we expect net realizations to be in the order of about US$55/bbl. Sales volumes for crude oil and gas is likely to remain flat on sequential basis.
- GAIL should witness improved set of numbers on qoq basis owing to one time write offs in the previous quarter. Transmission volumes are likely to dip moderately on qoq basis. For GSPL, we expect lower transmission volumes on the back of falling KG-D6 gas production. Petronet is expected to see a strong growth in revenues driven by higher volumes. IGL earnings would be under pressure as rupee depreciation and higher proportion of imported LNG in its raw material basket will hurt margins.
- Our top pick in the sector is ONGC, Oil India, GSPL and Petronet LNG.
Q1 FY13 estimates
Company
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Sales (Rs mn)
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OPM (%)
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PAT (Rs mn)
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Q1 FY13
|
yoy (%)
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qoq (%)
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Q1 FY13
|
yoy (bps)
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qoq (bps)
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Q1 FY13
|
yoy (%)
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qoq (%)
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BPCL
|
531,671
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15.2
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(17.8)
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(1.3)
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336
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(919)
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(8,010)
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-
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-
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Cairn
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43,471
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17.1
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19.1
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80.5
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(503)
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(117)
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28,212
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3.4
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17.4
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GAIL
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111,159
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25.1
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6.0
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14.5
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(323)
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720
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9,694
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(1.5)
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100.6
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GSPL
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2,717
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(5.5)
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(2.5)
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91.7
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(53)
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44
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1,214
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(11.6)
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(6.1)
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HPCL
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437,295
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6.9
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(16.6)
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(1.3)
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494
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(1186)
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(10,498)
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-
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-
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IGL
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7,440
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38.5
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3.2
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21.0
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(848)
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(252)
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677
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(15.5)
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(16.2)
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IOC
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1,155,996
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14.1
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(10.0)
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(1.4)
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41
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(1291)
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(39,885)
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-
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-
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MRPL
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159,032
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18.9
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(1.1)
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4.6
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290
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(175)
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4,009
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133.4
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(33.2)
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Oil India
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28,986
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17.2
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60.8
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49.0
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(408)
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1766
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9,807
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8.0
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120.5
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ONGC
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207,132
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26.3
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7.1
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60.4
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224
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54
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56,339
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35.3
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(0.2)
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Petronet
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69,263
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49.8
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8.6
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5.9
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(359)
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(75)
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2,403
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(6.4)
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(2.0)
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Reliance
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948,340
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17.1
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11.3
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7.2
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(502)
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(47)
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43,897
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(22.5)
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3.6
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Average rating : 5.0 |
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| Thank you for the rating. |
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