Will oil giants' Q3 profit margin fall..see what the report says

Stepping towards inventory losses and lower gross refining margins, it is expected that the operating profits of the state-owned oil marketing companies- IOC, BPCL, and HPCL- may fall significantly in the October-December period[ Q3 FY24].

Will oil giants' Q3 profit margin fall..see what the report says

New Delhi: Seeing the market report, the Oil Marketing Companies' diesel marketing margins sharply declines to Rs 0.5 per litre. The well know companies that are giving a great time and controlling 90 per cent of the market may see a sharp fall in the profit margin for the latest quarter (Q3) for the Financial year 2023-2024.

As per the firm, Brent averaged at around $84 per barrel in Q3FY24, down 3% on quarter, closing at $19 per barrel lower at $78/bbl between the two-quarter ends, thereby accounting to refining inventory losses of $2.5-3 per barrel for OMCs.

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The gross refining margins of three OMCs also fell to $5-6 per barrel from $9-10 a barrel on quarter in Q3FY24. The firm’s analysts are expecting OMCs to record a 70-80% decline in EBITDA on quarter.

Q3FY24E PAT[profit after tax] for IOCL is estimated at Rs 2600 crore, while BPCL and HPCL would witness PAT of Rs 6,000 crore and Rs 2,000 crore.

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Meanwhile, in the first two quarters of the financial year, the three OMCs have been able to make healthy profits compared to the first half of the last fiscal with respect to improved marketing margins.

The three OMCs reported a combined net profit of Rs 27,783.59 crore in the quarter ended September against a cumulative loss of Rs 3,724.39 crore in the same period a year ago.

The firm expects crude oil production and sales by the two companies largely flat, with around 5% rise on quarter in Oil India’s gas volume.

EBITDA of upstream companies is anticipated to bring a small improvement of 2% on quarter due to improvement in oil and gas production and lower operational expenditure as per ICICI Securities.

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