MOSL: HPCL (Neutral)-Adj. EBITDA below estimate-core GRM at USD2.7/bbl
HPCL: Adj. EBITDA below estimate; core GRM at USD2.7/bbl
(HPCL IN, Mkt Cap USD4.8b, CMP INR229, TP INR209, 9% Downside, Neutral)
- HPCL reported EBITDA of INR30b (est. 23.2b, +4% YoY, -19% QoQ). However, knocking off inventory gains, core EBITDA stood at INR20.1b (est. 20.8b, -5% YoY, +44% QoQ). Forex loss stood at INR8.9b against gain of INR200m in 2QFY18 and loss of INR5.4b in 1QFY19. Interest cost stood at INR2b (est. 1.5b, +28% YoY, +5% QoQ). Other income came above estimates at INR4.1b (est. 3.4b, -17% YoY, +35% QoQ). PAT came in at INR10.9b (est. 11.4b, -37% YoY, -36% QoQ).
- Core GRM stood at USD2.7/bbl (est. of USD3.9; USD5.5/bbl in 2QFY18 and USD3.2 in 1QFY19). Core GRM was lower YoY due to higher fuel and losses. However, despite distillate yield increasing from 74.2% in 1QFY19 to 76.72% in 2QFY19, core GRM declined reflecting higher production of products, which witnessed decline in cracks sequentially. Refining throughput stood at 4.8mmt v/s 4.6mmt in 2QFY18 and 4.5mmt in 1QFY19.
- Marketing sales volume grew 4% YoY (-6%QoQ) to 9.1mmt in 2QFY19. Implied gross marketing margin including inventory expanded 10% YoY (-10% QoQ) to INR4.2/liter. Net of inventory gain, marketing margin stood at INR3.5/liter, flat YoY, +3% QoQ.
Hindustan Petroleum is engaged in the refining and marketing of petroleum products. Co. operates 2 major refineries producing a wide variety of petroleum fuels & specialties, one in Mumbai (West Coast) of 6.5 Million Metric Tons Per Annum (MMTPA) capacity and the other in Vishakapatnam, (East Coast) with a capacity of 8.3 MMTPA. Co. also owns and operates a Lube Refinery producing Lube Base Oils of international standards, with a capacity of 428 TMT. Co.'s marketing network is facilitated by a Supply & Distribution infrastructure comprising Terminals, Pipeline networks, Aviation Service Stations, LPG Bottling Plants, Inland Relay Depots & Retail Outlets, Lube and LPG Distributorships.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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