MOSL: IOC (Buy)-Adj. EBITDA significantly below estimate; core GRM at USD3.4/bbl
IOC: Adj. EBITDA significantly below estimate; core GRM at USD3.4/bbl
(IOCL IN, Mkt Cap USD22.3b, CMP INR161, TP INR254, 58% Upside, Buy)
- IOCL’s EBITDA of INR126b (+142% YoY, +14% QoQ) was above our estimate of INR107b. However, total inventory gain stood at INR79b (est. of INR26b) – refining inventory gain stood at INR59b (USD6.9/bb) and marketing gain stood at INR19.5b. Adjusting for the same, EBITDA stood at INR47.1b (est. of INR80.4b; -49% YoY, -38% QoQ), significantly below our estimate due to a poor core GRM. PAT stood at INR68.3b (est. of INR57.5b; +50% YoY; +31% QoQ). Forex loss during the quarter stood at INR18.1b v/s a gain of INR6.1b in 1QFY18 and a loss of INR6.8b in 4QFY18.
- Core GRM stood at USD3.4/bbl (est. of USD5.5; USD6.1 in 4QFY18 and USD6.6 in 1QFY18). Core GRM was lower in line with SG benchmark cracks. Refining throughput grew 1% YoY (+3% QoQ) to 17.7mmt.
- Domestic product sales volume grew 4% YoY/QoQ to 20.5mmt in 1QFY19. Implied gross marketing margin, including inventory, expanded 15% YoY (+2% QoQ) to INR5.2/liter. Net of inventory gain, the marketing margin stood at INR4.4/liter.
- Petrochemical EBITDA declined 10% YoY (-3% QoQ) to INR16.3b, impacted by lower sequential volumes and lower product deltas.
Indian Oil is engaged in the sale of imported crude oil; and exploration of petrochemicals, and oil and gas. Co.'s products include liquefied petroleum gas, natural gas, petrol/gasoline, diesel/gas oil, aviation turbine fuel/jet fuel, lubricants and greases, marine fuels and lubricants, kerosene, bulk/industrial fuels, bitumen, petrochemicals, and crude oil. Co. also provides other products, which comprise benzene, carbon black feed stock, food grade hexane, jute batching oil, micro crystalline wax, mineral turpentine oil, paraffin wax, propylene, raw petroleum coke, sulphur, and toluene.
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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