OMCs’ profits seen diving 88% to Rs 3,600 crore in FY20
High inventory and forex losses are seen to cut the profits of state-run oil marketing companies (OMCs) by 88% annually to Rs 3,600 crore in FY20. Also, analysts expect these firms’ profits to remain lower than FY19 levels, in both FY21 and FY22, due to muted marketing margins and stagnant volumes.
Global brokerage firm Nomura has also expressed its disappointment in the de facto government controls over the pricing of auto fuels, which are seen to restrict OMCs from boosting their marketing margins, a situation that adversely impacts their balance sheets when global oil prices firm up.
