IOCL Q1 Review - Better-Than-Expected Margins Drive Beat: Motilal Oswal
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Motilal Oswal Report
Indian Oil Corporation Ltd. reported a beat on our estimates, led by higher-than-estimated reported gross refining margin ($6.6/barrel of oil), marketing margins (Rs 6.2/litre), and marketing sales volumes (down 6% QoQ – despite the second Covid-19 wave led lockdowns).
Thus, IOCL's Ebitda stood at Rs 111 billion (up 65% estimate, up 102% YoY, down 18% QoQ), with profit after tax at Rs 59 billion (up 211% YoY, down 32% QoQ).
Singapore GRM is averaging higher month-on-month at $2.9/bbl in July (versus $2/bbl in Q1 FY22), the highest ever since the Covid-19 outbreak in February 2020.
Recovery is entirely driven by higher demand for gasoline; while aviation turbine fuel and gasoil margins remain the same month-on-month at $4.3/4.7.
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