Oil marketing companies’ Q1 margins to take a hit: ICICI

Robust refining margins notwithstanding, Indian Oil Corporation’s Q1 FY23 income soon after tax (PAT) is very likely to slide by all around 68% in the initial quarter to Rs 1,937 crore quarter-on-quarter (q-o-q) on marketing losses, brokerage agency ICICI Direct Exploration estimated.

In a report launched Thursday, ICICI Direct mentioned Hindustan Petroleum Company (HPCL) might report a Rs 3,721-crore loss and Bharat Petroleum Company (BPCL) Rs 1,642 crore in the 1st quarter of the present-day fiscal.

“Overall, gross refining margins (GRMs) for refiners are envisioned to improve q-o-q and are predicted to be in the assortment of $25-27/bbl. Refining segment earnings are possible to be even further supported by inventory gains. On the internet marketing front, marketing and advertising volumes are envisioned to grow in the assortment of 19-21% y-o-y. In terms of marketing margins, we estimate losses as OMCs did not pass on bigger crude oil fees to shoppers,” it reported.

“We also notice that the firms are very likely to face internet marketing stock losses owing to excise responsibility minimize in May possibly. We assume a person OMC to report ~68% q-o-q decrease in earnings while the other two OMCs are anticipated to report losses,” it extra.

For IOC, it stated GRMs in the initially quarter of the latest fiscal are predicted at $26.5/bbl, up from $18.5/bbl in Q4 FY22. However the advertising phase volumes could have amplified by 18.7% y-o-y, there will be losses on the advertising and marketing front as the enterprise did not go escalating crude oil fees to customers.

While for BPCL, the GRMs in Q1FY23 would be at IOC’s stage of $26.5/bbl, the organization is anticipated to have incurred losses on the advertising and marketing entrance for not passing the escalating enter prices to consumers even as internet marketing segment volumes could be larger by 20.5% y-o-y.

HPCL’s GRMs would be just a very little higher than the two at $26.6/bbl, but “we hope a web reduction of 13,721.6 crore”, ICICI Immediate stated.

Lending support to the government’s exertion to rein in inflation, OMCs have not improved petrol and diesel selling prices considering the fact that Could 22.