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India Equity Research Reports, IPO and Stock News
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Indraprastha Gas: Fuel price hikes strengthen prospects for volume growth
[Amit Murarka]
The Government of India increased the retail selling price of LPG by 1.5% and diesel
by 9% on Friday June 24. For Indraprastha Gas (IGL), this opens up the possibility of
increasing the selling price of subsidised piped natural gas (PNG) to households as,
according to the company, it is now at a c10% discount to LPG. Moreover, after
these price hikes, compressed natural gas (CNG) as a motor fuel is 69% cheaper
than petrol and 40% cheaper than diesel. We expect this relative cost attractiveness
of gas over liquid fuels to drive IGL’s CNG sales volume growth, as private car
conversions and sales of new factory-fitted CNG cars gather pace.
Automobiles & Components: Toyota’s “Liva” launched at a competitive price
[Srinivas Rao]
Toyota has launched the ‚Etios Liva‛ – its premium hatchback for the Indian
market – at a starting price of Rs 399,000 (approx USD 8900). We believe that the
Liva’s price should enable it to compete aggressively in this segment – especially
with Maruti (the segment leader). Honda is also slated to launch its premium
compact – Brio – later this year at around Rs 450,000. Key highlights: The car will
qualify as a ‘small car’ due to which the excise duty applicable will be at the lower
rate of 10% (vs 22% for large cars). In fact this is one reason which has likely
enabled Toyota to aggressively price its car. The car is being launched with a 1.2-
litre petrol engine and will be available in four trim levels.
Asia Economics Special: India: Fiscal worries rise on oil price measures
[Taimur Baig]
The much-belated administrative price adjustment of a broad range of fuel
products took place this past weekend, as anticipated by us in earlier notes. Price
increases for diesel (INR3/litre; 8%), kerosene (INR2/litre; 15%), and cooking gas
(INR50/cylinder; 14%) were modest in comparison to the sharp rise in global crude
oil prices, especially as this was the first price hike in a year. Along with the price
increases, selected reductions in customs and excise took place as well. The point
of lowering duties while raising the retail price is simple – this acts as a twopronged approach to reduce the losses of oil marketing companies.
India Equity Strategy: Fuel price hike: More bold decisions ahead [Abhay
Laijawala]
Following a sharp escalation in under-recoveries of oil marketing companies
(OMC’s), the government of India finally raised oil prices – including those of fuels
used by the Aam Admi (common man) – particularly kerosene prices, which have
been raised for second time in a year, taking the cumulative hike in kerosene
prices to >50% since June 2010. The decision to raise fuel prices at a time when
the government is facing a barrage of popular unrest from civil activism and a
belligerent political opposition is a bold move, in our view.
Oil & Gas: Another attempt at reining in under-recoveries [Harshad Katkar]
The government has increased the prices of subsidized petroleum products and
simultaneously cut customs and excise duties on these products. This leads to a
reduction of 15% in our FY12 gross under-recovery estimate to INR1,458bn. We
reiterate our Buy on ONGC and OIL as the biggest beneficiaries of the
government’s action on fuel prices. We maintain our Sell rating on BPCL and
HPCL as their fortunes remain dependent on the level of government
compensation for under-recoveries
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Indraprastha Gas: Fuel price hikes strengthen prospects for volume growth
[Amit Murarka]
The Government of India increased the retail selling price of LPG by 1.5% and diesel
by 9% on Friday June 24. For Indraprastha Gas (IGL), this opens up the possibility of
increasing the selling price of subsidised piped natural gas (PNG) to households as,
according to the company, it is now at a c10% discount to LPG. Moreover, after
these price hikes, compressed natural gas (CNG) as a motor fuel is 69% cheaper
than petrol and 40% cheaper than diesel. We expect this relative cost attractiveness
of gas over liquid fuels to drive IGL’s CNG sales volume growth, as private car
conversions and sales of new factory-fitted CNG cars gather pace.
Automobiles & Components: Toyota’s “Liva” launched at a competitive price
[Srinivas Rao]
Toyota has launched the ‚Etios Liva‛ – its premium hatchback for the Indian
market – at a starting price of Rs 399,000 (approx USD 8900). We believe that the
Liva’s price should enable it to compete aggressively in this segment – especially
with Maruti (the segment leader). Honda is also slated to launch its premium
compact – Brio – later this year at around Rs 450,000. Key highlights: The car will
qualify as a ‘small car’ due to which the excise duty applicable will be at the lower
rate of 10% (vs 22% for large cars). In fact this is one reason which has likely
enabled Toyota to aggressively price its car. The car is being launched with a 1.2-
litre petrol engine and will be available in four trim levels.
Asia Economics Special: India: Fiscal worries rise on oil price measures
[Taimur Baig]
The much-belated administrative price adjustment of a broad range of fuel
products took place this past weekend, as anticipated by us in earlier notes. Price
increases for diesel (INR3/litre; 8%), kerosene (INR2/litre; 15%), and cooking gas
(INR50/cylinder; 14%) were modest in comparison to the sharp rise in global crude
oil prices, especially as this was the first price hike in a year. Along with the price
increases, selected reductions in customs and excise took place as well. The point
of lowering duties while raising the retail price is simple – this acts as a twopronged approach to reduce the losses of oil marketing companies.
India Equity Strategy: Fuel price hike: More bold decisions ahead [Abhay
Laijawala]
Following a sharp escalation in under-recoveries of oil marketing companies
(OMC’s), the government of India finally raised oil prices – including those of fuels
used by the Aam Admi (common man) – particularly kerosene prices, which have
been raised for second time in a year, taking the cumulative hike in kerosene
prices to >50% since June 2010. The decision to raise fuel prices at a time when
the government is facing a barrage of popular unrest from civil activism and a
belligerent political opposition is a bold move, in our view.
Oil & Gas: Another attempt at reining in under-recoveries [Harshad Katkar]
The government has increased the prices of subsidized petroleum products and
simultaneously cut customs and excise duties on these products. This leads to a
reduction of 15% in our FY12 gross under-recovery estimate to INR1,458bn. We
reiterate our Buy on ONGC and OIL as the biggest beneficiaries of the
government’s action on fuel prices. We maintain our Sell rating on BPCL and
HPCL as their fortunes remain dependent on the level of government
compensation for under-recoveries
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