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Oil & Gas Q4FY22: There was a lot of movement in the sector due to expensive crude; Make profit strategy in RIL, ONGC, Oil India, GAIL

Due to expensive crude, there was a lot of action in the fourth quarter of FY 2022. Oil and gas prices have also increased at the domestic level.

Oil & Gas Stocks: Crude has gained a lot due to geopolitical tension. Talking about Q4FY22, the average price of Brent crude during the entire quarter has been $100 per barrel. Benchmark GRM increased to $8/bbl. Due to the increase in crude prices, the prices of petrol, diesel and natural gas have also increased at the domestic level. In such a situation, the fourth quarter of FY 2023 has been full of action for the Oil & Gas sector. The brokerage house says that due to higher oil prices, upstream companies will benefit, although core earnings of OMCs may be affected due to weak marketing margins. Margins of city gas distributors may be better. At the same time, increasing gas prices will help ONGC and Reliance Industries to increase their margins.

OMCs: Marketing margins may remain weak

Brokerage house Emkay Global says that when it comes to oil marketing companies ie OMCs, they can make inventory gains and are expected to remain strong. But even after the increase in crude prices, the marketing margin may remain weak due to the late increase in the prices of petrol and diesel and LPG. This will affect the overall earnings of these companies. According to the brokerage house, these companies may suffer forex losses.

forecasting profits of companies

According to the report, the PAT of IOCL, BPCL and HPCL can be Rs 6800 crore, Rs 1500 crore and Rs 700 crore during the period. IOCL can get the maximum benefit from the inventory gains. The brokerage house estimates that the Q4 PAT of ONGC and Oil India can be Rs 11400 crore and Rs 1400 crore. This is possible due to higher oil realization and dividend income. The total production of ONGC and OIL is expected to decline by 3 per cent and increase by 5 per cent on an annual basis during this period.

gas sector forecast

Talking about the gas sector, LNG volumes may be affected due to higher prices. However, margins are expected to be better. GAIL’s profit may decline 4 per cent on a quarterly basis in 4QFY22. GSPL’s volumes are expected to decline by 6 per cent on a quarterly basis. Whereas APAT is also expected to decrease by 6 percent. IGL’s PAT may increase by 19 per cent to Rs 370 crore. The PAT of Guj Gas is estimated to be more than double to 280 crores. Talking about PLNG, PAT may decline by 32 percent on a quarterly basis.

RIL Earnings

RIL’s earnings may increase by 4-6 per cent on a quarterly basis. RIL’s conso EBITDA is estimated to increase by 4 per cent to Rs 31,000 crore. Talking about Jio, there may be some reduction in the subscriber base, but the ARPU can increase by 8 percent to Rs 164. Retail EBITDA is expected to grow by 8 per cent to Rs 4150 crore.

(Disclaimer: Stock or sector advice is given by the brokerage house. These are not the personal views of Markets are risky, so take expert opinion before investing.)

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