HDFC Securities: Tough Times Ahead For Oil And Gas Sector Due To Lockdown And Lower Refining Margins - Q2 Earnings Preview

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HDFC Securities Report

Revenue for our coverage universe is likely to decline by approximately 22% YoY owing to the lockdown and a sharp correction in crude oil and gas prices.

This has resulted in a decline in sales for oil marketing companies, GAIL India Ltd. and city gas distribution entities and lower realisation for upstream companies.

We expect Ebitda for oil and gas companies under our coverage to decline by approximately 26% YoY in Q2 owing to lower refining margins and per unit Ebitda margins for CGD companies.

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