State-run oil marketing companies – Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum – may post a combined loss of Rs 10,700 crore in the first quarter of the current fiscal, ICICI Securities said on Monday.
The brokerage firm said the loss will be due to selling transport fuels at a loss of Rs 12-14 per litre even as there gross refining margins (GRMs) will remain fairly strong at $17-18 per barrel.
“We estimate GRMs to remain fairly strong at US$17-18/bbl levels (factoring-in inventory loss of US$0.1-0.2/bbl) and marketing volume growth of 17-20%, thanks to continued recovery in prospects and a weaker base. Yet, the sharply higher retail losses of ~ Rs 12/ltr in petrol + diesel combine to drive an EBITDA loss of Rs 66 bn and a net loss of Rs 107 bn for the OMCs in Q1FY23E,” ICICI Securities said.
Going forward, with some decline seen in crude in the last 2-3 days and the resultant dip in key product spreads as well, some respite will be forthcoming for the marketing losses. However, the delta from GRMs will also reduce, which will limit earnings triggers for FY23, it said.
The three city gas distributors including Indraprastha Gas (IGL), it said, are likely to report divergent trends in Q1. While IGL sees both volume and margin expansion by 48% Y-o-Y and 30% respectively, Mahanagar Gas (MGL) sees volume growth by 35%, but EBITDA/scm dips 25% YoY. For Gujarat Gas (GGL), we see volume growth of only 1%, but EBITDA/scm rise of 8%, YoY.
“Overall, for CGDs we estimate EBITDA growth of 31% and PAT growth of 36%, YoY,” it said.
ICICI Securities estimates Reliance Industries (RIL) to post highest-ever consolidated EBITDA/PAT of Rs 38,900 crore/24,400 crore, clocking a 67% growth and 77% grwoth respectively. These all-time highs would come on the back of a massive 80% growth inoil to chemical (OTC) segment EBITDA, sharply higher (up 100% YoY) retail EBITDA, and EBITDA growth of 26% YoY for RJio.
Prospects for the next nine months for RIL of course stand impacted by the estimated US$8/bbl hit from the higher duties imposed with effect from July 1.
“We expect Oil India to deliver an EBITDA of Rs 2,830 crore, up 129% YoY, and PAT of Rs 2,290 crore. These gains would be mostly driven by the sharply higher average crude price of US$108/bbl (up US$42/bbl YoY) and blended gas realisations of Rs 17/scm (up Rs 8.7/scm YoY),” ICICI Securities said.