IOC reported Q4FY19 EBITDA of Rs 108.78, down 1.3% YoY. Adjusting for inventory losses and forex gains, core EBITDA was Rs 73.99bn. Refining: It was a muted quarter wrt this business. Throughput was 17.4mmt (+0.9/-8.6% YoY/QoQ). The sequential fall is primarily owing to planned shutdowns of their Koyali and Panipat refineries in Mar and Guwahati refinery in Jan. Core GRM (excluding inventory gains of USD 2.6/bbl) was USD 1.5/bbl vs USD 9.0/bbl in 3Q. GRMs were impacted owing to lower light distillate cracks. In Q1FY20, refining margins have recovered from the Q4 lows (Singapore GRM at USD 3.2/bbl to 5.5) owing to increase in gasoline cracks (from USD 3.4/bbl to 12.3) and stable middle distillate cracks. The implementation of International Maritime Organisation’s (IMO) regulations from Jan-20 will lead to better GRMS for IOC (from USD 4.6/bbl to 5.4 in FY20E). Marketing: Volume was 22.6mmt (+5.8/-0.7% Yoy/QoQ). India’s petroleum product consumption was up 4.19% YoY, which shows that IOC has gained market share in Q4. Blended gross margin stood at Rs 5.74/lit (+50.4/40.9% YoY/QoQ). Though these margins seem unsustainable, we believe that they will remain in the range of ~Rs 3/lit in FY20-21E. Capex: Plans to incur Rs 250bn in FY20 (largely in the refining and marketing businesses), of which Rs 40bn is specifically for BS-VI up gradation. Additionally, Rs 56bn will be spent to set-up a 357KTPA MEG
plant at Paradeep (expected commissioning FY22). Ennore LNG Terminal: Made their maiden LNG supply to anchor customers, including CPCL’s Manali refinery.
Source: financialexpress.com