BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Indian Oil Corporation Ltd. and Hindustan Petroleum Corporation Ltd.’s share prices have declined by 8-12% in the last one month and are now trading at 0.7-0.79 times FY21E price/book .
Oil marketing companies corrected despite sharp recovery in auto fuel consumption (petrol up 3% YoY and diesel down 6% YoY in September), auto fuel net margins appearing to be on track to be over Rs 3/litre in FY21E and Singapore gross refining margin and petrol cracks rising to eight-month high.
Diesel cracks remain a concern though they are up from September 2020 lows.
However, Hindustan Petroleum Corporation and Indian Oil Corporation’s share prices are factoring in low GRMs.
We have raised OMCs’ FY21E marketing margin estimates by 32%, but cut GRM estimates by 38-71%.
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