Oil & Gas 3QFY15E Results Preview :: HDFC Securities

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BPCL : Sudden fall in crude prices will lead to huge inventory losses.
Quarterly results are not comparable as it depends on subsidy
contribution from the govt and net subsidy sharing by OMCs. Forex
gain/loss can further distort quarterly results. Guidance on
Mozambique and Brazil E&P assets are the key.
 Cairn India : Results will be muted led by lower volumes and lower
crude prices. Update on the production ramp up plan and clarity on
PSC extension are the key. The falling crude price is a major overhang.
 GAIL : We expect transmission volumes of ~95 mmscmd. Subsidy
contribution for 2QFY15 will lead to a drop in profitability. We do not
expect any further under recovery sharing by GAIL post the gas price
hike. Margins on petchem and LPG segments will be under pressure
due to the fall in crude prices. Margins in the gas trading biz and rise in
gas transmission are key.
 IGL : Volumes will be flat QoQ at 3.9 mmscmd. EBITDA margin will fall
due to rise in domestic gas prices. No benefits from the lower spot
prices as most of the LNG is contracted under long term agreements.
 Petronet LNG : We expect ~23% YoY growth in volumes to ~3 mnT.
Higher volumes will lead to EBITDA growth. Lower depreciation due to
change in accounting policy will further boost profitability. Early
resolution of Kochi-Mangalore-Bangalore pipeline is the key.
 ONGC : Quantum of subsidy sharing makes results incomparable.
Muted volumes and lower crude prices will drag profitability.
Production ramp-up and clarity in subsidy sharing are the key.
 Reliance Industries : We expect GRM of US$ 8.0/bbl (-4% QoQ). KG D6
gas production should be ~12 mmscmd. Margins in petchem should be
strong. Outlook on GRM and update on the capex schedule are key.

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