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1QFY12 PAT was substantially below our subsidy adjusted estimates primarily due to lower than
expected GRMs. Petchem business continued to report losses which we believe could be due to
a slow ramp up in petchem volumes.
IOC reported a loss of Rs24.2bn at EBITDA level in 1QFY12 compared to our subsidy
adjusted loss estimate of Rs10.6bn. The disappointment was primarily due to lower than
expected GRMs and higher operational costs even though this was partly offset by higher
than expected product inventory gains.
While refining throughput of 14.3mt (+7.7%yoy, +0.5% qoq) was in line with our estimates,
GRMs of US$4.71/bbl (US$7.85/bbl in 4QFY11) were significantly below our expectations of
US$8.2/bbl. The management stated that the reported GRMs include crude inventory loss of
US$2.35/bbl resulting out of fall in crude prices and scrapping of the customs duty on crude.
Note on June 25 2011, government of India (GOI) removed the 5% customs duty on crude
while Brent was down 4.8% qoq in 1QFY12. Product inventory gains for IOCL during the
quarter were Rs14mn compared to our estimate of Rs2bn and loss of Rs2.6bn in the
immediately preceding quarter
During the quarter, IOC has accounted for Rs82bn as GOI contribution towards gross retail
under recoveries which was disclosed some days back. The net under recoveries for IOC in
1QFY12 were Rs76.7bn or 32.2% share in gross under recoveries.
The petchem business continues to disappoint with yet another quarter of losses. In 1QFY12,
petchem segment reported a EBIT loss of Rs4.1bn compared to loss of Rs1.7bn in 4QFY11
and loss of Rs17bn in FY11. We believe the continued disappointment is due to slower than
expected ramp up in petchem volumes.
The company reported net loss of Rs37.2bn in 1QFY12 vs our subsidy adjusted estimate of
Rs19.3bn reflecting the underperformance at EBITDA level.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
1QFY12 PAT was substantially below our subsidy adjusted estimates primarily due to lower than
expected GRMs. Petchem business continued to report losses which we believe could be due to
a slow ramp up in petchem volumes.
IOC reported a loss of Rs24.2bn at EBITDA level in 1QFY12 compared to our subsidy
adjusted loss estimate of Rs10.6bn. The disappointment was primarily due to lower than
expected GRMs and higher operational costs even though this was partly offset by higher
than expected product inventory gains.
While refining throughput of 14.3mt (+7.7%yoy, +0.5% qoq) was in line with our estimates,
GRMs of US$4.71/bbl (US$7.85/bbl in 4QFY11) were significantly below our expectations of
US$8.2/bbl. The management stated that the reported GRMs include crude inventory loss of
US$2.35/bbl resulting out of fall in crude prices and scrapping of the customs duty on crude.
Note on June 25 2011, government of India (GOI) removed the 5% customs duty on crude
while Brent was down 4.8% qoq in 1QFY12. Product inventory gains for IOCL during the
quarter were Rs14mn compared to our estimate of Rs2bn and loss of Rs2.6bn in the
immediately preceding quarter
During the quarter, IOC has accounted for Rs82bn as GOI contribution towards gross retail
under recoveries which was disclosed some days back. The net under recoveries for IOC in
1QFY12 were Rs76.7bn or 32.2% share in gross under recoveries.
The petchem business continues to disappoint with yet another quarter of losses. In 1QFY12,
petchem segment reported a EBIT loss of Rs4.1bn compared to loss of Rs1.7bn in 4QFY11
and loss of Rs17bn in FY11. We believe the continued disappointment is due to slower than
expected ramp up in petchem volumes.
The company reported net loss of Rs37.2bn in 1QFY12 vs our subsidy adjusted estimate of
Rs19.3bn reflecting the underperformance at EBITDA level.
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