PSU OMCs witness selling pressure

Shares of three PSU OMCs fell by 5.37% to 6.90% at 13:17 IST on BSE on concerns that gross refining margins and inventory gains could come off in Q2 September 2015 due to a sharp fall in crude oil prices.

HPCL (down 6.90%), BPCL (down 5.76%) and Indian Oil Corporation (down 5.37%), edged lower.

The S&P BSE Sensex was down 178.77 points, or 0.64% at 27,687.32.

Brent crude oil prices have witnessed a sharp slide in Q2 September 2015 so far.

HPCL after market hours yesterday, 11 August 2015, reported a sharp surge in bottom line in Q1 June 2015 as its gross refining margin (GRM) rose sharply. HPCL said that the sharp surge in GRM in Q1 June 2015 was due to improved cracks and inventory gains. HPCL's net profit jumped 3349.26% to Rs 1588.04 crore on 12.45% decline in total income to Rs 52034.17 crore in Q1 June 2015 over Q1 June 2014. HPCL's average gross refining margin (GRM) in Q1 June 2015 stood at $8.56 per barrel, up sharply from $2.04 per barrel in Q1 June 2014.

HPCL did not receive any subsidy from the Government of India (GoI) in Q1 June 2015 on sale of PDS kerosene and domestic LPG as against a subsidy receipt of Rs 176.95 crore in Q1 June 2014. HPCL received discount of Rs 218.25 crore on purchase of crude from ONGC in Q1 June 2015. This was much lower than discount of Rs 3608.69 crore which the company received from upstream companies on purchases of crude oil, PDS kerosene and domestic LPG in Q1 June 2014.

HPCL has accounted for Budgetary Support amounting to Rs 450.61 crore from GoI towards under-recoveries on sale of PDS SKO in Q1 June 2015. This was much lower than Budgetary Support from GoI amounting to Rs 2516.41 crore in Q1 June 2014.

Indian Oil Corporation will announce Q1 results tomorrow, 13 August 2015. BPCL will announce Q1 results on Friday, 14 August 2015.

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