Oil And Gas Sector Q4 Results Review- Some Misses, But FY24E Likely To Be A Blockbuster Year: ICICI Securities
Mahanagar Gas the standout in Q4; prospects strong for all three city gas distribution players.
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ICICI Securities Report
Q4 FY23 Ebitda/profit after tax for our oil and gas coverage universe was much stronger than in the preceding quarter. Ebitda grew 22% and profit after tax 29% YoY in Q4 FY23 versus a flat Ebitda and 17% YoY decline in profit after tax in Q3 FY23.
Robust improvement in the results of Reliance Industries Ltd. and the oil marketing companies were primarily responsible for the aggregate earnings jump. This was despite muted results for the gas companies owing to a stronger base and sharp deceleration in GAIL India Ltd.’s earnings momentum.
QoQ trends were uniformly stronger with all sub-segments, barring upstream, reporting QoQ growth in both Ebitda and profit after tax (up 33% and 62% QoQ respectively).
Going forward, with moderate gas prices, crude at less than $75/barrel of oil and improving infra/gas supplies, we expect FY24E earnings per share to trend materially higher than in FY23.
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