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Informist, Tuesday, Jun. 17, 2025

 

By Sunil Raghu

 

AHMEDABAD – Four of the 10 major oil and gas companies in the Nifty 200 index not only reported sales growth during the March quarter, but also helped the sector as a whole post year-on-year sales growth of 1.7%. While the rise may not seem much, it was better than what analysts had forecast. The consensus estimate was that the 10 companies put together would see their sales for the March quarter fall 0.8%.

 

The remaining six companies saw their sales decline during the quarter. Four of them saw a fall that was less than what the Street had expected, but the other two fell way short of expectations.

 

The fall in net profit for the oil and gas companies in the Nifty 200, excluding Adani Total Gas, was less than the Street's estimate. Analysts had expected the average net profit of the 10 companies to fall 22% on year. As it turned out, the actual fall was 4.4% on year. Nine of the 10 companies clocked a fall that was less steep than estimated. Only Oil and Natural Gas Corp. Ltd. saw its net profit fall more than expected.

 

The companies that saw their net profit fall less than expected were Oil India Ltd., Reliance Industries Ltd., Indian Oil Corp. Ltd., GAIL (India) Ltd., Indraprastha Gas Ltd., Petronet LNG Ltd., Mangalore Refinery and Petrochemicals Ltd., Bharat Petroleum Corp. Ltd., and Hindustan Petroleum Corp. Ltd. No estimates were available for Adani Total Gas, the 11th Nifty 200 company in the sector. Even including Adani Total Gas, the fall in net profit for the sector was almost unchanged. The revenue growth of the companies in the sector, including Adani Total Gas, was also up marginally on year.

 

This was the fifth successive quarter of revenue growth for the sector. Of the 11 Nifty 200 companies in the sector, nine reported an on-year rise in revenue. Reliance Industries, which accounted for more than 31% of the aggregate revenue for the sector, did the bulk of the heavy lifting, though the revenue of the company's oil and gas segment fell slightly to INR 64.40 billion from INR 64.68 billion a year ago.

 

Quarter on quarter, the aggregate net profit of oil and gas companies for the March quarter rose a little less than 3% and the revenue rose 3.3%. The aggregate net profit margin for the sector contracted to 5.69% from 6.06% a year ago. The net profit margin was 5.71% in the December quarter, 5.12% in the September quarter, and 4.70% in the June quarter.

 

The total expenses of the oil and gas companies for the March quarter rose nearly 2% on year. Cost of materials consumed and purchases of stock-in-trade, which together accounted for 80% of total expenses, rose 4% and 3%, respectively, on a year-on-year basis. The rise in total expenses for the sector was driven by an 8.8% on-year rise in other expenses and a 1.7% rise in depreciation and amortisation. These together accounted for more than 14% of the total expenses. Sequentially, the total expenses of the sector rose 2.8%.

 

As of Mar. 31, the total debt of the sector was INR 6.17 trillion, up 8.7% on year. Indian Oil Corp. and Reliance Industries were the major drivers for this, with an on-year rise in debt of 15% and 7%, respectively. Indian Oil's total debt increased by INR 179.70 billion, and that of Reliance Industries increased by INR 229.08 billion.

 

According to data compiled from industry trackers and company filings, refining margins improved during the quarter, while government support and pricing stability in liquefied petroleum gas and petroleum products propped up the downstream companies. Upstream companies did not, however, benefit much from steady crude oil prices and stable production levels.

 

OIL MARKETING COMPANIES

The public-sector refining and marketing companies like Indian Oil, Bharat Petroleum, and Hindustan Petroleum reported slightly improved retail and industrial sales volumes, aided by stable diesel and petrol consumption in urban centres and increasing industrial demand. The net profit of oil marketing companies that are part of the Nifty 200 index fell in the March quarter, led by a significant drop in net profit for Bharat Petroleum and Mangalore Refinery. This drop was, however, less than analysts' expectations owing to better refining margins and the 50% on-year jump in net profit reported by Indian Oil, the biggest state-owned oil marketing company, thanks to a fall in operating expenses and lower under-recoveries on domestic LPG. The jump in net profit was despite Indian Oil's revenue falling 1% on year, largely because of a 2.2% on-year fall in sales of petroleum products. The fall was curtailed somewhat by higher pipeline throughput and petrochemicals revenue.

 

Similarly, Hindustan Petroleum posted an 18% rise in net profit, buoyed by higher crude throughput, an inventory gain, and better gross refining margins. Its revenue, meanwhile, fell 2.6%, on a 17.3% jump in the cost of materials consumed.

 

On the other hand, Bharat Petroleum posted a 24% on-year fall in net profit, as its average gross refining margins dropped by more than half and because of impairment loss on investment of its subsidiary. The company's revenue declined despite an increase in refinery throughput and sales during the March quarter.  

 

All four oil marketing companies in the Nifty 200 index reported an on-year fall in revenue. Bharat Petroleum was the worst performer with an over 4.6% on-year decline in sales, followed by Hindustan Petroleum, which saw its sales fall 4.4% on year in the March quarter. The net profit for the downstream players rose 8.9% on year in the quarter. Analysts had estimated the aggregate net profit for these companies to fall more than 54%. Mangalore Refinery, however, saw its net profit fall a whopping 68.3% on year, to become the biggest drag on the net profit of the oil and gas sector.

 

The aggregate total expenses of oil marketing companies rose 1.9% on year. The cost of materials consumed and purchases of stock-in-trade, which together accounted for nearly 87% of total expenses of the companies, rose 4.0% and 3.0%, respectively, on a year-on-year basis. Sequentially, the total expenses grew nearly 2.8%.

 

WEAK VALUE CHAIN

The quarter saw a notable slip in the natural gas ecosystem. GAIL (India) reported a 6.0% year-on-year fall in its profit despite staying ahead of the estimates. Rising expenses and a weaker performance in its petrochemicals and natural gas transmission services segments dragged the company's net profit lower. The revenue of the country's biggest natural gas player rose 10.0% on year as its sales grew at its fastest pace in eight quarters.

 

Indraprastha Gas Ltd. benefited from the government's push for city gas distribution and favourable spot liquefied natural gas prices. Petronet LNG also exceeded expectations with a 45% jump in profit on the back of higher margins as LNG spot prices increased a whopping 49% on year. The rise in profit came in spite of a fall in the company's revenue on account of lower sales volumes. A large part of Petronet LNG's sales is tied to long-term LNG purchased at discounted rates. Hence, any jump in LNG spot prices pushes the company's margin higher. Improved capacity utilisation at the Dahej, Gujarat, and Kochi, Kerala, terminals too helped boost profitability.

 

UPSTREAM FALL

The upstream oil producers, ONGC and Oil India, were among the weakest contributors to the sector's overall performance, especially net profit. ONGC posted a 35% year-on-year decline in net profit and a 1% rise in revenue driven by a 4% rise in revenue from offshore operations, which accounted for 71% of the company's total revenue. Oil India, meanwhile, saw a 22?ll in profit on account of a fall in crude oil sales. Its revenue also fell 0.2% on year.

 

At 1442 IST Tuesday, shares of Indian Oil Corp. were slightly lower at INR 141.45 on the National Stock Exchange. Shares of Reliance Industries were also slightly lower at INR 1,433.00 while those of ONGC were down 1.8% at INR 252.12. Shares of GAIL (India) were almost 0.8% lower at INR 190.17 and Petronet LNG was 1.1% lower at INR 297.40 per share.

 

Company Name	Index	Sales Jan-Mar 2024 Actual	Sales Estimate Jan-Mar 2025	Sales % Growth YoY (Estimated)	Sales % Growth YoY (Actual)	PAT Jan-Mar 2024 Actual	PAT Jan-Mar 2025 Estimate	PAT % Growth YoY (Estimated)	PAT % Growth YoY (Actual)	Number of Brokerages	Net Sales YoY % Change	Profit attributable to shrholders - YoY % Change	PAT excluding Exceptional Items - YoY % Change	Net Sales - QoQ % Change	Profit attributable to shrholders - QoQ % Change	PAT excluding Exceptional Items - QoQ % Change
Adani Total Gas	Nifty 100				14.94				-7.96		14.94	-7.96	-7.96	3.62	8.58	8.58
Bharat Petroleum Corp.	Nifty 50	11,65,551	11,13,514	-4.46	-4.61	60,222	26,595	-55.84	-17.17	9	-4.61	-23.91	-17.17	-1.73	-30.87	7.29
GAIL (India)	Nifty 100	3,23,177	3,47,412	7.50	10.42	21,770	19,519	-10.34	-5.88	12	10.42	-5.88	-5.88	2.14	-47.02	43.55
Hindustan Petroleum Corp.	Nifty 200	11,45,569	10,78,071	-5.89	-4.42	28,428	17,988	-36.72	18.02	11	-4.42	18.02	18.02	-0.92	10.99	10.99
Indian Oil Corp.	Nifty 100	19,79,782	20,39,789	3.03	-1.52	48,377	20,235	-58.17	50.15	9	-1.52	50.17	50.15	0.55	152.82	231.10
Indraprastha Gas	Nifty 200	35,968	38,273	6.41	9.84	3,828	3,075	-19.68	-8.77	12	9.84	-8.77	-8.77	5.09	22.19	22.19
Mangalore Refinery and Petrochemicals	Nifty 200	2,53,287	2,20,612	-12.90	-2.89	11,451	2,779	-75.73	-68.29	3	-2.89	-68.06	-68.29	12.46	19.38	19.38
Oil and Natural Gas Corp.	Nifty 50	3,46,367	3,36,960	-2.72	1.00	98,694	85,831	-13.03	-34.66	9	1.00	-34.66	-34.66	3.75	-21.74	-21.74
Oil India	Nifty 200	55,273	53,551	-3.12	-0.15	20,288	14,381	-29.12	-21.56	8	-0.15	-21.56	-21.56	5.33	30.26	30.26
Petronet LNG	Nifty 200	1,37,932	1,20,836	-12.39	-10.71	7,376	7,898	7.08	45.09	12	-10.71	45.09	45.09	0.73	23.44	23.44
Reliance Industries	Nifty 50	23,65,330	23,96,873	1.33	10.51	1,89,510	1,83,566	-3.14	2.41	10	10.51	2.41	2.41	8.92	4.68	4.68
Grand Total		78,08,236	77,45,891	-0.80	1.72	4,89,943	3,81,868	-22.06	-4.41

 

End

 

Edited by Rajeev Pai

 

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