MOSL: IOC (Buy)-Better-than-expected marketing margins result in a beat
IOC: Better-than-expected marketing margins result in a beat
(IOCL IN, Mkt Cap USD21.3b, CMP INR157, TP INR198, 26% Upside, Buy)
4QFY19 EBITDA (adj. for inventory and one-offs) stood at INR74b (-10% YoY, -40% QoQ) due to lower-than-expected core GRM and refining throughput. EBITDA was ~45% above our estimate, primarily led by better marketing performance. PAT was 63% above our estimate at INR61b (+17% YoY), owing to higher other income and lower tax rate.
- Interest cost was higher at INR12.4b (-5% YoY, +47% QoQ). Forex gain was at INR8.4b (v/s loss of INR6.8b in 4QFY18 and gain of INR21b in 3QFY19). Total inventory gain stood at INR26b in 4QFY19 (our est. INR25b).
- Refining throughput stood at 17.4mmt (v/s 17.2mmt in 4QFY18 and 19.0mmt in 3QFY19). Core GRM at USD1.4/bbl was below our estimate of USD3.5/bbl (USD6.1/bbl in 4QFY18 and USD9.2/bbl in 3QFY19).
- Record high marketing margins (incl. of inventory) at INR6.7/lit beat our est. of INR3.7/lit (INR5.1/lit in 4QFY18 and INR3.5/lit in 3QFY19).
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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