LATEST
NEWS
Q1FY2018
Oil & Gas Result Review: Inventory losses impact OMCs; Mid-stream benefits
from volume growth
·
Refining
(downstream) dented by inventory losses suppressing refining margins; OMCs also
lose market share in domestic HSD/MS sales: Brent oil price declined by around
7% sequentially to $51/bbl in Q1FY2018, resulting in inventory loss of
$2-3.4/bbl to oil marketing companies (OMCs). As a result, Indian Oil
(IOCL)/Bharat Petroleum (BPCL)/Hindustan Petroleum (HPCL) reported weak
Q1FY2018 gross refining margin (GRM) of $4.3/$4.9/$5.9 per barrel, which was
down by 52%/19%/27% sequentially, though the benchmark Singapore GRM was
largely flat QoQ at $6.4/bbl in Q1FY2018. On the other hand, Reliance
Industries Limited (RIL) reported strong GRM of $11.9/bbl (up 3.5% YoY and QoQ)
and its premium over the Singapore Complex GRM widened to $5.5/bbl in Q1FY2018
from $5.1/bbl in Q4FY2017. Public sector OMCs also witnessed loss in market
share in the high-margin motor spirits (MS) and high-speed diesel (HSD)
segments to private sector competitors.
·
Exploration
(upstream) companies hurt by lower realisations: Oil and Natural Gas Corp.
(ONGC)/Oil India reported a decline of 7.1%/7.8% QoQ (+10.7%/+12.3% YoY) in
their net oil realisation to $51/$48.4 per barrel due to the drop in oil prices
during the quarter. Along with lower realisation, the steep dip in other income
led to a sharp decline in adjusted profit of ONGC and Oil India during the
quarter.
·
Mid-stream
companies in gas value chain performed well in Q1: Petronet LNG and GSPL
reported healthy volume growth during the quarter, resulting in double-digit
earnings growth. On the other hand, Gas Authority of India (GAIL) reported
sequential volume decline across segments, except for LPG and liquid
hydrocarbons (volume increased by 6.2% QoQ) in Q1. Consequently, PAT grew by
only 8.2% during the quarter, partially affected by lower other income.
TOP
NEWS
Tourism: Terror
attack in Barcelona will halt the performance of the business and will reduce
the tourist attraction in European countries – negative read through for Cox
& Kings (especially for Meininger business) and Thomas Cook India
Liquor: Half the
liquor outlets remain shut post the highway liquor ban, liquor industry feels
the pinch – negative for liquor companies (especially large companies such as
United Spirits, United breweries and Radico Khaitan, which has pan India
presence) More than half of 30,000 liquor vendors have shut downed their shops
on April 1 after the Supreme Court banned sale and serving of alcohol within
500 metre of state and national highways. Industry had initially expected most
liquor shops and bars to either relocate or reopen in few months. But now
expects the situation to normalise by next year. On the positive note, the top
court last allowed authorities to de-notify state and national highways passing
through municipal limits to let liquor vends along highways in cities and towns
resume business.
HPCL: Government
of Rajasthan and HPCL signed agreement to set-up refinery at Barmer; positive
read through for HPCL
Rajasthan Government has signed an
agreement with Hindustan Petroleum Corporation Limited (HPCL) to set up a joint
venture company HPCL Rajasthan Refinery Limited to establish Rs 43,129 crore
refinery-cum-Petrochemical Complex at Barmer as per media reports. HPCL will
have 74% stake and the state government 26% partnership in the new company.
Positive read through for HPCL.
OTHER
NEWS
Indian Oil
Corp (IOCL) : has
completed maintenance turnaround at its polyethylene (PE) and polypropylene
(PP) plants at Panipat. The plants were shutdown in mid-July for maintenance.
PE plant has HDPE capacity of 0.3mmt and LDPE swing capacity of 0.2mmt while PP
plant has capacity of 0.6mmt. Sentimentally positive for IOCL.
Maruti
Suzuki: Launches
the Ciaz – S, a sporty version
of its sedan Ciaz with prices starting Rs 9.39 Lakh; Positive, Maruti Suzuki
has launched a new variant of Ciaz named as Ciaz S priced at Rs 9.39 Lakh for
petrol and Rs 11.55 Lakh (ex showroom Delhi) for diesel variant. T he Ciaz S
has been refreshed with a spoiler pack – front, side
and a rear underbody plus trunk-lid spoiler, adding a distinctive look and
enhancing the aerodynamics of the car. The new variant would further strengthen
the position of Ciaz in the passenger vehicle market and could lead to market
share gains for the company
Somany
Ceramics: Sudha
Somany Ceramics, an Associate of Somany Ceramics is setting up a facility in
Andhra Pradesh to produce about 5.00 million square meters of vitrified tiles.
The same is expected to be commissioned in the last quarter of financial year
2018-19. Positive read thru for the stock.
Infosys: ATP in association with Infosys
launches new PlayerZone bringing an enhanced digital experience for players,
ATP and Infosys announced the launch of a new 'PlayerZone' app and website. The
revamped PlayerZone, allows users to engage with each other and access
information across a wide range of operational aspects related to life on Tour.
The new app will increase engagement with the next generation of players and
provide a central portal of information as players' progress through different
stages of their career.
Bharti
Airtel: To hold
shareholders, creditors meet in September on Telenor merger deal.
Telecom: IMG meeting on telecom postponed to
August 22, The Inter-Ministerial Group (IMG) constituted to suggest measures to
ease the financial stress in the telecom sector, which was supposed to meet
today, will now meet on August 22, and it is likely to come out with the final
report on suggestions for the industry on the same day.“The meeting has been postponed to
August 22 as some of the members were not available for the meeting on Friday.
The IMG was set up on May 16 to work on the stress in balance sheets in the
telecom sector, and has been studying balance sheets of the past three years
(2014-15, 2015-16 and 2016-17) of telcos. Meanwhile, on its last its meeting on
August 11, the IMG had discussed that a policy intervention may not be required
as ‘green shoots’ in the
telecom sector have started to appear in the first quarter.
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