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After a forgettable last week, the markets started off on a strong note on Monday, rallying about 2.5 per cent.
Stocks of the public oil marketing companies – IndianOil, HPCL and BPCL – did better buoyed by strong December quarter results which were declared after market close last Friday.
IndianOil and HPCL gained 6-7 per cent; BPCL too rallied, but gave up most of its gains later and closed 1.3 per cent higher.
Similar to their private sector peers, the PSU refiners have registered improved gross refining margin (GRM) in the year so far.
For the nine months ended December 2015, IndianOil’s GRM increased to $5.83 a barrel against a negative $2.66 a barrel in the year-ago period.
HPCL’s GRM rose to $6.35 a barrel compared with $1.04 a barrel a year-ago. BPCL too improved its nine-month GRM to $6.69 a barrel from $2.08 a barrel in the previous year.
While crude oil prices have crashed, demand for end-products such as petrol, diesel and LPG has been healthy, translating into good margins for these products and for the refiners that make them.
This coupled with growth in volumes and low subsidy burden from selling LPG and kerosene below cost helped the oil marketing companies grow profit strongly, though sales revenue fell 15-22 per cent due to lower product price.
From a loss of Rs 2,637 crore in December 2014 quarter, IndianOil swung to a profit of Rs 3,057 crore in the recent December period. Similarly, HPCL posted a profit of Rs 1,042 crore compared with a loss of Rs 325 crore in the year-ago period. BPCL’s profit almost tripled year-on-year to Rs 1,489 crore.
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