MOSL: HPCL (Neutral)-Hit by high inventory loss-limited ability to raise prices until elections
HPCL: Hit by high inventory loss; limited ability to raise prices until elections
(HPCL IN, Mkt Cap USD4.8b, CMP INR225, TP INR231, 3% Upside, Neutral)
- HPCL reported a core GRM of USD10/bbl in 3QFY19, resulting in core EBITDA of INR38.3b (more than double YoY/QoQ; our estimate: INR36.3b). Inventory loss of INR35b was higher than our estimate of INR19.7b, resulting in EBITDA of INR3.7b (-88% YoY/QoQ; our estimate: INR16.6b). Forex gain stood at INR6.97b v/s INR2.7b in 3QFY18 and a loss of INR8.9b in 2QFY19. PAT declined 87% YoY (-77% QoQ) to INR2.5b.
- Core GRM stood at USD10/bbl (our estimate: USD3.6; USD6.1/bbl in 3QFY18; USD2.7 in 2QFY19). Against SG GRM of USD4.3/bbl in the quarter, HPCL reported a core GRM of USD10/bbl. However, inventory loss of USD6.3/bbl resulted in a reported GRM of USD3.7/bbl.
- Marketing sales volume grew 3% YoY (7%QoQ) to 9.7mmt in 3QFY19. Implied gross marketing margin including inventory stood at INR3.3/lit, flat YoY, but down from INR3.9/lit in 2QFY19.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.