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1QFY12 PAT was substantially below our subsidy adjusted estimates as reported GRMs were
much below our expectations. The company bore net retail under recoveries of 32.2% during the
quarter after accounting for GOI contribution.
HPCL reported a loss of Rs26.9bn at EBITDA level in 1QFY12 compared to our subsidy
adjusted loss estimate of Rs13.4bn. The disappointment was primarily due to lower than
expected GRMs and higher staff costs even though this was partly offset by higher than
expected product inventory gains.
Refining throughput of 3.97mt(+20.7%yoy, -8.1% qoq) was in line with our estimates. QoQ
throughput declined due to the scheduled refinery shutdowns.
Like the other two OMCs, HPCL also reported sharp qoq decline in GRMs despite rise in
benchmark GRMs. 1QFY12 GRMs of $1.09/bbl (vs US$8.6/bbl in 4QFY11 and lowest in the
last six quarters) were substantially below our estimate of US$9.5/bbl. Note these GRMs
include crude inventory losses (not disclosed separately) which can significantly dampen the
true refining margins. On June 25 2011, government of India (GOI) removed the 5% customs
duty on crude while Brent was down 4.8% qoq in 1QFY12. To put into perspective, IOC
reported 1QFY12 GRMs of US$4.7/bbl after adjusting for crude inventory loss of US$2.35/bbl.
Consequently refining gross profits of Rs1.4bn was substantially below our estimate of
Rs12.4bn.
Product inventory gains for HPCL during the quarter were Rs2.2bn compared to our estimate
of Rs800mn and Rs3.9bn in the immediately preceding quarter. OMCs continue to show
divergence in quarterly trends while reporting product inventory gains.
During the quarter, HPCL has accounted for Rs32.7bn as GOI contribution towards gross
retail under recoveries which was disclosed some days back. The net under recoveries for
HPCL in 1QFY12 were Rs30.6bn or 32.2% share in gross under recoveries.
The company reported net loss of Rs30.8bn in 1QFY12 vs our subsidy adjusted estimate of
Rs16.6bn 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 as reported GRMs were
much below our expectations. The company bore net retail under recoveries of 32.2% during the
quarter after accounting for GOI contribution.
HPCL reported a loss of Rs26.9bn at EBITDA level in 1QFY12 compared to our subsidy
adjusted loss estimate of Rs13.4bn. The disappointment was primarily due to lower than
expected GRMs and higher staff costs even though this was partly offset by higher than
expected product inventory gains.
Refining throughput of 3.97mt(+20.7%yoy, -8.1% qoq) was in line with our estimates. QoQ
throughput declined due to the scheduled refinery shutdowns.
Like the other two OMCs, HPCL also reported sharp qoq decline in GRMs despite rise in
benchmark GRMs. 1QFY12 GRMs of $1.09/bbl (vs US$8.6/bbl in 4QFY11 and lowest in the
last six quarters) were substantially below our estimate of US$9.5/bbl. Note these GRMs
include crude inventory losses (not disclosed separately) which can significantly dampen the
true refining margins. On June 25 2011, government of India (GOI) removed the 5% customs
duty on crude while Brent was down 4.8% qoq in 1QFY12. To put into perspective, IOC
reported 1QFY12 GRMs of US$4.7/bbl after adjusting for crude inventory loss of US$2.35/bbl.
Consequently refining gross profits of Rs1.4bn was substantially below our estimate of
Rs12.4bn.
Product inventory gains for HPCL during the quarter were Rs2.2bn compared to our estimate
of Rs800mn and Rs3.9bn in the immediately preceding quarter. OMCs continue to show
divergence in quarterly trends while reporting product inventory gains.
During the quarter, HPCL has accounted for Rs32.7bn as GOI contribution towards gross
retail under recoveries which was disclosed some days back. The net under recoveries for
HPCL in 1QFY12 were Rs30.6bn or 32.2% share in gross under recoveries.
The company reported net loss of Rs30.8bn in 1QFY12 vs our subsidy adjusted estimate of
Rs16.6bn reflecting the underperformance at EBITDA level.
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