Oil & Gas Q4 Results Preview - Improvement For Downstream Segment: HDFC Securities

HDFC Securities Institutional Equities

We expect our coverage universe Ebitda to increase by up 2% YoY, up 10% QoQ, owing to an improvement in profitability from the downstream segment due to higher demand for petroleum products, higher refining throughput and gross refining margins.

Upstream segment earnings are impacted by ~18/8% YoY/QoQ decline in crude oil prices and lower production, despite a YoY increase in domestic administered price mechanism gas realisations.

We expect lower gas volumes for city gas distribution companies, owing to high retail compressed natural gas prices and spot liquefied natural gas prices.

We expect gas volumes for transmission companies and Petronet LNG Ltd. to improve with spot LNG prices moderating QoQ.

We expect Reliance Industries Ltd. to report Ebitda of Rs 378 billion (up 20.4% YoY, up 7.1% QoQ), supported by a steady performance from the retail and telecom segments.

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