BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Indian Oil Corporation Ltd.'s reported Ebitda of Rs 213 billion (up 4.3 times YoY), in line with our estimate of Rs 210 billion, led by better-than-expected gross refining margin at $17.9/barrel of oil (versus our estimate of $14.9/bbl) and higher marketing gross margin at Rs 5.8/litre (versus our estimate of Rs 5/lit).
Refining throughput came in line with our estimate at 17.8 million metric tonne (up 10% YoY). In the marketing segment, domestic sales volumes were also in line with our estimate at 21.9 mmt (up 2% YoY).
Singapore GRM has declined to $3.3/bbl in Q3 FY24 to date from $9.8/bbl in Q2 FY24, which may lead to a decline in the refining performance in the coming quarter. A decline in Russia crude discounts may also weigh on Indian Oil's performance in the ensuing quarter.
Oil marketing companies are estimated to be generating marketing margin of Rs 8.2 on petrol and a marketing loss of Rs 3.8 on diesel in Q3 FY24 to date. Margins may also be affected by retail fuel price cuts in the wake of upcoming elections and/or a rise in crude oil prices due to quota management by Organization of the Petroleum Exporting Countries plus.
Petchem sales volumes increased by 53% YoY to 0.82 mmt (versus 0.54 mmt in Q2 FY23). Petchem Ebit came in at Rs 1.6 billion (below our estimate of Rs 3.2 billion). Petchem margins have declined 13%/4% for polyethylene/polypropylene in Q3 FY24 to date.
Owing to a robust performance in H1 FY24, we increase our Ebitda/profit after tax estimates by 11%/13% for FY24 while keeping FY25 estimates broadly unchanged.
The stock trades at 6.9 times consolidated FY25E EPS and 0.7 times FY25E price/book value. We retain our 'Buy' rating on the stock, valuing it at 0.9 times FY25E P/BV.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
