OMCs - Offtake remains flat during 11mo FY12

• Provisional Oil Marketing Companies data for 11mo FY12 depicted flattish industry growth of mere 0.2%YoY to 16,377K MT from 16,337K MT in the comparable period last year. Sales of HSD depicted a decline of 1% YoY, to 6,210K MT in the period under review. MOGAS sales are up by 22% YoY in 11mo FY12 to 2,505K MT. FO sales depicted a decline of 4% YoY in 11mo FY12.

• Seasonal uptick was witnessed in both MOGAS and HSD as sales for both these products increased by 24%MoM and 48%MoM respectively. Moreover, FO sales also improved on MoM basis as demand for power generation increases during the summer season.

• PSO’s market share in HSD+MOGAS+FO sales declined by 1pps to 65% in 11mo FY12, while APL’s share in the pie inched up to 8% from 6% last year. Shell’s share also fell by 4pps to 9% due to lower FO sales in the period under review. APL continues to increase its market share in HSD as well as MOGAS due to an increase in its storage capacity.

We maintain a positive outlook on the sector, on the back of both volumetric growth and higher margins in FY12 and beyond. APL could stand out in terms of earnings growth in FY12, as the company’s earnings are anticipated to be fuelled by both higher offtake and higher margins. On the flipside however, inventory losses will negatively impact the 4Q FY12 results for the OMCs.

OMCs - Offtake remains flat during 11mo FY12