Chennai Petroleum - De-levering To Augment Shareholder Wealth On Stronger GRMs: Anand Rathi Initiates Coverage

The company has one of the best core performances in Indian refiners, which has a Nelson complexity of ~10.

<div class="paragraphs"><p>Chennai Petroleum Corporation Ltd. (Source: Company website)</p></div>
Chennai Petroleum Corporation Ltd. (Source: Company website)

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Anand Rathi Report

With operational synergies with parent Indian Oil Corporation Ltd., the 10.5 million tonnes per annum Chennai Petroleum Corporation Ltd. is a pure play on refining.

It includes pooled sourcing of crude oil and bulk purchases through the latter (Indian Oil purchases over 90% of its output). The high refining-margin context and robust demand would support Chennai Petroleum’s de-levering to augment shareholder wealth.

The company has one of the best core performances in Indian refiners, which has a Nelson complexity of ~10.

Falling crude prices and discounted crude sourcing have reduced working capital and eased debt.

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Anand Rathi Chennai Petroleum Corporation Initiating Coverage Note.pdf
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