BPCL, HPCL, IOCL - Drop In Crude Prices Augurs Well: Prabhudas Lilladher

Crude oil prices have corrected to ~$76/barrel of oil, down ~40% from June-22 highs of $125/bbl post Russia-Ukraine war

<div class="paragraphs"><p>An oil rig. (Photo: Maria Lupan/ Unsplash)</p></div>
An oil rig. (Photo: Maria Lupan/ Unsplash)

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. 

Prabhudas Lilladher Report

Crude oil prices have corrected to ~$76/barrel of oil, down ~40% from June-22 highs of $125/bbl post Russia-Ukraine war due to rising global recessionary concerns amidst rising interest rates (to calm inflationary pressures) despite increasing Chinese demand post relaxation of pandemic lockdown and likely lower supplies from Russia (due to imposition of oil price cap of $60/bbl).

Softening crude prices augur well for oil marketing companies, as at current prices diesel marketing losses turn around to up Rs3.5/litre from H1 FY23 loss of ~Rs 13/litre, while refining margins remain resilient.

We increase our FY24/25E marketing margins on diesel and petrol to Rs 3.5/4.0 (Rs 2.0/3.5 earlier), reduce operating expense (due to likely lower liquefied natural gas prices) and increase earnings by 50-130%.

Click on the attachment to read the full report:

Prabhudas Lilladher - Oil&Gas Sector Check.pdf


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.