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OMCs’ earnings to be driven by better diesel marketing margins and GRMs. Diesel marketing margins were back in the black at Rs3/ltr vs. negative ~Rs0.5/ltr QoQ, while petrol margins improved by 12% to ~Rs7.5/ltr in Q4FY24. Brent averaged at ~USD83/bbl in Q4FY24, down 2% QoQ; however, it closed ~USD9/bbl higher at ~USD87/bbl between the two quarter ends, thereby resulting in refining inventory gains of ~USD2/bbl (but could accrue mainly for HPCL). Sizeable marketing inventory losses across OMCs should be there due to RSP cuts in sensitive fuels. Benchmark GRMs improved to USD7-8/bbl from USD5-6/bbl QoQ, mainly led by improvement in gasoline spreads. Russian crude discounts were largely range-bound, while Middle East OSPs were lower by USD1-2/bbl. We expect BPCL and HPCL to record better EBITDA QoQ, albeit on a low base, while IOCL could see a 7% dip due to inventory loss adjustments. Q4FY24E PAT for IOCL is estimated at Rs78bn, while BPCL/HPCL would see PAT of Rs47bn/34bn.

Steady upstream earnings continue; OIL scores on output growth. Windfalladjusted oil realizations remain firm at ~USD75/bbl. ONGC/Oil India’s crude output is estimated to decline 4%/grow 5% YoY, while gas is forecast to fall 5%/grow 1%. We estimate an EBITDA dip of 3% QoQ for ONGC on lower output and higher costs, while OIL is likely to see 9% improvement, led by lower opex. We estimate ONGC/OIL’s RPAT at Rs84/13bn during Q4FY24. OIL’s consolidated earnings would remain range-bound QoQ, amid a ~10% QoQ decline in NRL earnings on lower utilization and higher opex.

GAIL, GSPL, and PLNG’s core performance to be largely range-bound. We estimate GAIL’s Q4FY24E standalone PAT at Rs28.7bn, largely flat QoQ, as we expect gas marketing margins to cool down by 21% QoQ. Gas volumes would be slightly up QoQ, while petchem earnings should improve further on lower gas costs and ~100% plant utilization levels. LPG earnings are likely to rise, as Aramco’s OSPs have increased ~6% QoQ. GSPL’s volume is likely to be up 5% QoQ, but EBITDA would decline marginally by 1% on lower tariffs. PLNG’s Dahej utilization should be steady at ~98%, with Kochi better at 24%. For PLNG, we estimate 8% lower APAT at Rs8.4bn, as implied marketing margin is assumed lower at ~USD2.5/mmbtu.

MGL and IGL to record contrasting core metrics; Gujarat Gas to benefit from better Morbi volumes and lower spot LNG prices QoQ: IGL is estimated to witness 11% QoQ EBITDA growth to Rs6.3bn, as unit EBITDA would be up 9% to Rs7.9/scm owing to lower gas costs, but volume growth would be at ~6% YoY. MGL could see better volume growth at 9% YoY, but unit EBITDA should decline by 6% QoQ on lower realization and range-bound gas costs. EBITDA could decline by 7% QoQ to Rs4.2bn. Morbi volumes are expected to recover, leading to 11% QoQ growth in Gujarat Gas’s volumes to 10.2mmscmd. EBITDA/scm would expand by 37% QoQ to Rs6.5, on lower gas cost. PAT is expected to remain flat YoY at Rs3.7bn (up 70% QoQ).

RIL’s earnings to be driven QoQ by better O2C, consumer businesses stable: We estimate RIL’s consolidated EBITDA would improve by 6% QoQ to Rs433bn, with O2C rising 16% to Rs163bn on better GRMs. We expect net subscriber addition of ~10.5mn QoQ for Jio, with a 0.4% higher ARPU at Rs182.5. Retail EBITDA should increase 1% QoQ to Rs63bn, while upstream EBITDA should dip 4% QoQ to Rs56bn on higher opex/profit petroleum. We estimate consolidated APAT (after MI) to also rise by 6% to Rs183bn.

Gulf Oil Lubricant is expected to witness ~8% YoY core volume growth, EBITDA/ltr is likely to dip 5% QoQ to Rs16 due to low-margin AdBlue volumes and higher COGS. We expect Q4FY24E EBITDA/PAT to be flat/grow 2% QoQ to Rs1.1bn/825mn.

Indigo’s earnings resilience continues in Q4, supported by better yields as well as load factors. We estimate yields to improve 5% YoY to Rs5.1, besides a 7% lower fuel cost/ASK, on correction in ATF prices. PLFs would remain strong at ~88%, as ASK/RPK rise 13%/18% YoY (down 6%/3% QoQ) to 34.4/30.3bn. We estimate PBT/ASK to stand at Rs0.56, with net income at Rs19.3bn for Q4FY24 (up >2x YoY).

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