A weak GRM of $3.1/barrel of oil (Singapore.), coupled with moderation of super normal Gross marketing margins on Auto fuel to Rs 8.2/litres and rising burden of LPG under-recovery (Rs 15.6/kg versus Rs 13.2/kg in Q3) that may drag OMCs earnings.
NDTV Profit'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 NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Dolat Capital Report
In Q4, our Oil and Gas coverage experienced a sharp decline, with Ebitda likely down by 15% YoY/12% QoQ to Rs 762 billion and PAT down by 32% YoY/24% QoQ to Rs 319 billion. Key factors impacting growth include-
A weak GRM of $3.1/barrel of oil (Singapore.), coupled with moderation of super normal Gross marketing margins on Auto fuel to Rs 8.2/litres and rising burden of LPG under-recovery (Rs 15.6/kg versus Rs 13.2/kg in Q3) that may drag OMCs earnings;
Reliance's consolidated Ebitda expected to decline on the back of weak O2C, while the rebound in retail and telecom to support earnings;
Despite a partial restoration of APM allocation for CNG, overall gas cost for city gas distributions stands pressurized mainly due to 3% Rs depreciation, sharp jump of 74% QoQ in HH gas price and elevated spot LNG price, thereby leading to expected declines in Ebitda/PAT of 21%/25% YoY for CGDs (however, sequentially, there may be an improvement in earnings mainly due to price hikes).
Furthermore, in Q4 FY25, India's LNG imports declined 9% YoY, and Petronet LNG Ltd.'s re-gasification volume growth slowed primarily due to a loss in market share. Petronet LNG witnessed a 7% decline in market share over the past year due to competition from other LNG terminals.
Our Top Picks are HPCL and Reliance Industries, while we also see potential for a positive surprise from GAIL, particularly on gas trading margins.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit 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 NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
