Oil, Gas Q2 Preview: Marketing Losses, Weakness In GRM, Windfall Tax To Impact Performance: ICICI Securities

Marketing losses, weakness In GRM, windfall taxes on both crude price and refined product exports to Impact sector performance.

<div class="paragraphs"><p>Aerial view of a large oil and natural gas refinery. (Photo: freepik)</p></div>
Aerial view of a large oil and natural gas refinery. (Photo: freepik)

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ICICI Securities Report

Q2 FY23E earnings for our oil and gas coverage universe may take a material hit from the continuous losses in fuel retailing, weak refining earnings QoQ, and the impact of windfall taxes on both crude price and refined product exports.

Even for gas companies, the high prices of liquefied natural gas and lower availability of volumes (on Gazprom cutting ~2.5 million tonne of volumes due to sanctions) are likely to impact volumes and margins across our coverage companies in the gas space.

Overall, oil and gas companies in our coverage are likely to see 32% YoY dip in Ebitda and 76% YoY decline in net earnings for the quarter, with oil marketing companies and gas utilities being the key drivers of weakness in the period.

QoQ performance is likely to be weak as well, with 21% dip in Ebitda and 58% estimated decline in net earnings.

Despite weak macro environment, city gas distributions may manage a decent 23% YoY jump in Ebitda in Q2 FY23E, thanks to a weak base and resilient margins.

Click on the attachment to read the full report:

ICICI Securities Oil Gas Q2FY23 Results Preview.pdf


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