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OMCs’ earnings to decline due to lower GRMs & marketing margins, inventory losses, but should be in the black. Diesel marketing margins fell to negative ~Rs0.5/ltr, while petrol margins improved 20% to Rs6.8/ltr in Q3FY24. LPG margins also turned negative, at ~Rs60/cyl. Brent averaged at ~USD84/bbl in Q3FY24, down 3% QoQ, closing ~USD19/bbl lower at ~USD78/bbl between the two quarter ends, thereby resulting in refining inventory losses of USD2.5-3/bbl for OMCs. Benchmark GRMs also slumped, to USD5-6/bbl from USD9-10/bbl QoQ, due to a correction in distillate spreads. Russian crude discounts shrank, while Middle-East OSPs were slightly higher. We expect OMCs to record 70-80% decline in EBITDA QoQ. Q3FY24E PAT for IOCL is estimated at Rs26bn, while BPCL/HPCL would see PAT of Rs6/2bn, respectively.

Upstream to see higher opex; OIL to record good output. Windfall-adjusted oil realizations sustained at ~USD75/bbl. ONGC/Oil India’s crude output is estimated to decline 2%/grow 7% YoY, while gas is forecast to decline 4%/grow 4%. We estimate an EBITDA decline of 14% QoQ for ONGC, on higher opex and lower output, with OIL also likely seeing a similar fall. We estimate ONGC/OIL’s RPAT at Rs84/16bn during Q3FY24. OIL’s consolidated earnings would remain range-bound QoQ, on stable NRL earnings amid healthy utilization.

GAIL, GSPL and PLNG’s core performance to be largely range-bound. We estimate GAIL’s Q3FY24E standalone PAT at Rs20.3bn, down 16% QoQ, as we expect gas marketing margins to decline 25% QoQ. Gas volumes would be slightly up QoQ, while petchem is expected to break-even on lower gas costs and ~95% plant utilization levels. LPG earnings are likely to stabilize, as Aramco’s LPG OSPs have increased ~35% QoQ. GSPL’s volume is likely to be up 3% QoQ, but EBITDA would decline 7% on higher opex and lower tariff. PLNG’s Dahej utilization should be steady at ~96%, with Kochi at 20%. For PLNG, we estimate 3% lower APAT at Rs7.9bn, while implied marketing margin

IGL’s margins to decline on APM cut, but volume growth to recover from the Q2 lows; margins to be range-bound for Gujarat Gas amid some volume growth QoQ: IGL is likely to witness 7% QoQ decline in EBITDA to Rs6.1bn in Q3FY24E, as unit EBITDA would fall 9% QoQ to Rs7.8/scm owing to higher gas costs, likely due to lower APM allocation; volume growth should be 5% YoY. Morbi volumes are expected to be flattish, resulting in Gujarat Gas’s volumes growing 5% QoQ to 9.8mmscmd. However, EBITDA/scm would be slightly lower, by 3% QoQ to Rs5.6, on higher gas cost. PAT is expected to improve marginally, by 2% QoQ to Rs3bn.

RIL declines marginally QoQ, as O2C weakness is largely offset by the steady consumer business growth: We estimate RIL’s consolidated EBITDA to drop 2% QoQ to Rs403bn, with O2C EBITDA declining 12% to Rs144bn on lower GRMs, accentuated by sustained weakness in petchem margins and reduced volumes. We expect net subscriber addition of ~10.5mn for Jio, with a 0.5% higher ARPU at Rs182.5. Retail EBITDA should increase 7% QoQ to Rs63bn, while upstream EBITDA is expected to grow 7% QoQ to Rs51bn, as KG-D6 volumes are likely to average at ~30mmscmd in Q3. We estimate consolidated APAT (after the JPL-RRVL MI) to drop, by 3% to Rs168bn.

GOLI likely to witness ~12% YoY core volume growth, with EBITDA/ltr up 8% QoQ to Rs17, mainly on lower unit opex. We expect Q3FY24E EBITDA/PAT to grow 18%/21% QoQ to Rs1.18bn/891mn, respectively

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