ONGC Rated 'Buy', Gujarat Gas 'Sell' In Yes Securities’ Oil And Gas Pack Ahead Of Q3 Results — Check Full List

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Yes Securities Report

Yes Securities expects the oil and gas sector to deliver robust core performance in Q3 FY26 on both YoY and QoQ basis. While upstream players may face pressure due to lower crude realisations, downstream companies, particularly OMCs, are likely to report significant YoY improvement in refining margins.

Marketing margins may remain slightly weaker, but minimal inventory losses and receivable inflows from prior LPG subsidy burdens should support earnings.

Standalone refiners such as Chennai Petroleum Corporation Ltd. and Mangalore Refinery and Patrochemicals Ltd. are positioned in a sweet spot, with better GRMs anticipated on elevated product cracks. However, forex depreciation could weigh on profitability across refiners and OMCs.

Reliance Industries Ltd. is expected to post stronger oil-to-chemicals performance on improved GRMs, alongside higher average revenue per user and subscriber additions in Jio, while retail Ebitda margins should remain steady on a growing topline.

City Gas Distribution volumes would increase QoQ for Mahanagar Gas Ltd. and decline marginally for Indraprastha Gas Ltd. due to winter and Gujarat Gas due to Morbi decline.

In terms of volume growth, Mahanagar Gas could witness a higher increase, and recovering spreads would support profitability. All three are expected to report sequential improvement in Ebitda spreads despite declining APM allocation, due to price hikes and fall in gas prices.

IGL and Gujarat Gas are expected to protect their sequential earnings on better Ebitda spreads despite a fall in volumes.

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