Benchmark refining margins have nearly doubled in Quarter 2 FY20 led by a surge in cracks across products. GRMs across IOC/BPCL/HPCL/RIL are expected to increase meaningfully this quarter.
Reliance Industries: Refining strength offsets petchem weakness
Reliance should benefit from a pick-up in refining margins and the benefits of gas usage flexibility as a feedstock in its refineries
Outlook: Oil Marketing Companies (OMC) should be key beneficiaries
OMCs should benefit with commencement of GRM recovery, sustainably strong marketing margins and inexpensive valuations. Privatisation of BPCL could lead to re-rating of the entire sector.
Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.
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