Oil & Gas Q2 Review - Weak Margins, High Input Costs Sink Earnings: ICICI Securities
The weakness was due to sharply lower OMC earnings, with still material marketing losses, relatively lower delta from GRMs.
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.
ICICI Securities Report
Q2 FY23 Ebitda for oil and gas coverage universe declined by a material 44% YoY, with profit after tax down 85% YoY for the quarter (QoQ Ebitda declined 35%, profit after tax declined 66%).
The weakness in Q2 FY23 was due to sharply lower oil marketing company earnings, with still material marketing losses and relatively lower delta from gross refining margins impacting earnings.
For gas companies, constraints on gas supply due to 2.5 million tonne liquefied natural gas stoppage by Gazprom in May 2022 and the very high gas prices resulted in a very weak quarter.
Ebitda for the six gas companies in our coverage declined 27% YoY (36% decline QoQ) with a similar 27% decline YoY in profit after tax (down 26% QoQ).
OMCs continued to see elevated losses for the second successive quarter, with Rs 201 billion of operating losses and a profit after tax loss of Rs 260 billion.
Click on the attachment to read the full report:
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.