Oil, Gas Q1 Results Preview - OMCs Hit By GRM, Retail Pain While GAIL Shines: Nirmal Bang

Nirmal Bang Report

GAIL India Ltd. leads with 69.3% YoY surge in Q1 FY25 profit after tax on the back of:

1. improved operations,

2. growth in gas transmission volume,

3. massive surge in Ebitda from Gas Transmission/Gas Marketing/LPG and HC segments and

4. reversal in Petchem segment from loss to profit.

Oil marketing companies are likely to see 70-90% YoY plunge in earnings. HPCL will be the worst hit with Q1 FY25 PAT crashing 90% YoY. BPCL/Indian Oil will likely report 71.2%/74% YoY decline in PAT.

We expect the YoY decline in gross refining margins and marketing margins from the highs a year ago to dent the earnings of BPCL/Indian Oil. In HPCL, the lower GRMs will be partly offset by 6.3% YoY growth in Refining throughput.

The Rs2/litre cut in motor spirit/high speed diesel pump price on March-15, 2024 (first change since April-6, 2022), has also resulted in muted pump margins for OMCs.

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