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ICICI Securities Report
Q1 FY25 Ebitda/profit after tax declined by 5%/15% YoY and 5/18% QoQ for our coverage universe (ex-Gulf Oil). We note sequential decline is driven by weak earnings from Reliance Industries, oil marketing companies (HPCL), Oil India, Gujarat State Petronet and Gujarat Gas. YoY operational earnings decline was due to fall in earnings of OMCs (HPCL), GSPL, ONGC and Mahanagar Gas.
Weaker refining segment impacted Reliance's performance with Singapore gross refining margin declining by $4/barrel of oil QoQ, while OMCs profitability was impacted by both weak refining and marketing segments.
Lower spot prices boosted volumes for city gas distributions and utilities. Upstream broadly delivered in line volume growth. Brent crude at $80-85/bbl and spot LNG prices at $11-13/metric million British thermal unit create a strong earnings environment for the sector, which may continue over FY25E, underpinning our broadly positive stance on the sector over the next 12 months.
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