{"id":350693,"date":"2020-05-11T12:36:51","date_gmt":"2020-05-11T07:06:51","guid":{"rendered":"https:\/\/infralive.com\/web\/?p=350693"},"modified":"2020-05-11T12:36:51","modified_gmt":"2020-05-11T07:06:51","slug":"duty-hike-on-petrol-and-diesel-to-hit-outlook-for-omcs","status":"publish","type":"post","link":"https:\/\/infralive.com\/web\/duty-hike-on-petrol-and-diesel-to-hit-outlook-for-omcs\/","title":{"rendered":"Duty hike on petrol and diesel to hit outlook for OMCs"},"content":{"rendered":"<p>Excise duty on petrol and diesel has been hiked by Rs 10-13\/l with OMCs required to absorb the hike. This would mean plunge in gross auto fuel marketing margin by 64% (Rs 12.1\/l) from Rs 19\/l on 5-May\u201920 to Rs 6.9\/l on 6-May\u201920. Assuming volume fall of 32-62% y-o-y, we estimate 1) net margin to decline to Rs 2.3-4.4\/l on 6-May\u201920 from Rs 14.5-16.5\/l on 5-May\u201920 and 2) Q1FY21E net marketing margin at Rs 5.4-7.4\/l.<\/p>\n<p>We are no longer confident of net marketing margin being Rs 2.5-3.0\/l in FY21E. Decline in crude throughput and sales volume appears imminent in FY21. Recent plunge in diesel cracks is also a matter of concern. We therefore have cut OMCs\u2019 volume and GRM estimates, which has meant a cut in their FY21E EPS by 10-27% and target price by 16-34%. We also downgrade OMCs to HOLD from BUY.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Excise duty on petrol and diesel has been hiked by Rs 10-13\/l with OMCs required to absorb the hike. This would mean plunge in gross auto fuel marketing margin by 64% (Rs 12.1\/l) from Rs 19\/l on 5-May\u201920 to Rs 6.9\/l on 6-May\u201920. Assuming volume fall of 32-62% y-o-y, we estimate 1) net margin to decline to Rs 2.3-4.4\/l on 6-May\u201920 from Rs 14.5-16.5\/l on 5-May\u201920 and 2) Q1FY21E net marketing margin at Rs 5.4-7.4\/l. We are no longer confident of net marketing margin being Rs 2.5-3.0\/l in FY21E. Decline in crude throughput and sales volume appears imminent in FY21. [&hellip;]<\/p>\n","protected":false},"author":39,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[130,195,138],"tags":[],"class_list":["post-350693","post","type-post","status-publish","format-standard","hentry","category-newspapers","category-oil-gas-the-financial-express","category-the-financial-express"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/350693","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/39"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=350693"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/350693\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=350693"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=350693"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=350693"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}