ECONOMY

Indian Oil Q4 Review – Strong Refining Margin To Partially Offset Marketing Losses: Motilal Oswal

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Indian Oil Corporation Ltd.’s reported Q4 FY22 numbers were below our estimates, with gross refining margin at $18.5/barrel of oil and marketing margin at Rs 2.3/liter.

Refinery throughput was in line, while marketing sales volumes were above our estimate.

Singapore GRM has been at a record high of $22.6/bbl in May 2022 from a loss of $1.5/bbl in May 2020 (during the Covid-19 pandemic). It stood at $2.1/$18.6 per bbl in May-21/April-22.

However, oil marketing companies are estimated to be generating losses of Rs 8.8/Rs 12.9 per liter on petrol/diesel at prevailing benchmark prices.

Petchem margin rose 14%/10%/5% QoQ in Q1 FY23 till date for polyethylene/ polypropylene/polyvinyl chloride, backed by a spike in product prices.

This will help IOCL clock an improved margin in Q1 FY23.

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