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HDFC Securities Report
Indian Oil Corporation Ltd.’s Q1 Ebitda and adjusted profit after tax were 13% and 18% below estimates, owing to higher-than-anticipated inventory losses.
Ebitda came to Rs 55 billion (down 29% YoY) versus the operating loss of 111 billion in Q4 FY20.
Refining business inventory losses were Rs 6 billion, and marketing inventory losses were Rs 32 billion. Forex gains stood at Rs 1 billion.
Adjusting for these, the core Ebitda stood at Rs 86 billion (up 35% YoY and down 15% QoQ).
Domestic marketing sales volume was 16.5 million metric tonne (down 24% YoY and 26% QoQ).
India’s petroleum product consumption contracted by 26% YoY and 23% QoQ, thus demonstrating that Indian Oil gained market share on an annual basis and lost market share sequentially.
Blended gross margin stood at Rs 6.0/litre (up 49% YoY and 30% QoQ) in Q1, but these do not seem sustainable in the near term. We expect the blended gross margin to correct approximately by Rs 4.3 in FY21/22E.
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