Oil & Gas Q3 Results Preview - Higher Gas Cost Continues To Hurt Growth: Systematix

Systematix Research Report

For Q3 FY23, the operating profit of our coverage universe is estimated to decline 5% QoQ (down 37% YoY) to Rs 44.6 billion, as gas prices hover at elevated levels, with the APM gas price too rising significantly.

Spot liquefied natural gas price corrected 33% QoQ, but remained strong and averaged at $31.3/metric million British thermal unit. Also, a 3% rupee depreciation over U.S. dollar during Q3 FY23 could put further pressure on earnings.

City gas distribution companies’ Ebitda margin is expected to fall by 193 bps sequentially, given their inability to pass on the 41% increase in APM gas price. Further, industrial piped natural gas was 15% expensive than propane during the quarter, which could keep demand for industrial-PNG from Morbi muted for Gujarat Gas Ltd.

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