Motilal Oswal - MOSL: OIL GAS 4QFY18 Preview-GRMs up YoY (down QoQ); crude prices increase YoY/QoQ; Marketing margins expand

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Motilal Oswal

Swarnendu Bhushan

MOSL: OIL & GAS 4QFY18 Preview-GRMs up YoY (down QoQ); crude prices increase YoY/QoQ; Marketing margins expand

Oil & Gas 4QFY18 Preview: GRMs up YoY (down QoQ); crude prices increase YoY/QoQ; Marketing margins expand

Singapore complex GRM stood at USD7.0/bbl in 4QFY18 v/s USD7.3/bbl in 3QFY18 and USD6.4/bbl in 4QFY17. We expect marginal inventory gain during the quarter.
Average Brent crude price was up 24% YoY and 9% QoQ to USD67/bbl. We expect higher realizations to benefit the upstream companies. ONGC and Oil India should see a YoY increase in EBITDA.
RIL is expected to clock GRM of USD11.4/bbl, led by strong benchmark (premium of USD4.4/bbl). The Petchem segment is expected to do better, led by healthy petchem deltas and strong volume growth.

Brent up 24% YoY and 9% QoQ; upstream subsidy nil in 4QFY18

Crude oil price continued to trend upward in 4QFY18. Average Brent crude price was up 24% YoY (+9% QoQ) at USD67/bbl. OMCs are likely to witness marginal inventory gain for the quarter.
We do not build in any net under-recovery either for the OMCs or for the upstream companies.

GRM at USD7.0/bbl, up from USD6.4/bbl in 4QFY17

Reuters Singapore Complex GRM was up 9% YoY (-3% QoQ) to USD7.0/bbl in 4QFY18 v/s USD7.3/bbl in 3QFY18 and USD6.4/bbl in 4QFY17.
PE, PP and PVC delta improved sequentially. POY and PSF spreads were up 11%/6% QoQ. RIL would benefit from healthy deltas and strong volumes growth during the quarter.

07/04/2018 22 EN

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Analysts

Swarnendu Bhushan

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MOSL: OIL & GAS 4QFY18 Preview-GRMs up YoY (down QoQ); crude prices increase YoY/QoQ; Marketing margins expand

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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