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Refining: Can India be global hub?

(Mar 7, 2007)

The public sector oil refining and marketing major, BPCL has recently decided to establish a trading desk at Singapore to manage its exports of refined products. This once again signifies the intent of Indian refiners to target exports and make India one of the major efining hubs in the world. Now, is the dream of becoming a global refining hub realistic?

Refining: A case for higher spreads!

(Jan 10, 2007)

While rising petroleum product prices have indeed been a cause of worry in recent times, the fact that this is not entirely crude price driven, makes us believe that they are likely to remain stronger on account of certain structural changes in the refining industry. Put otherwise, we believe that the spread between crude oil and product prices is likely to remain stronger than what it was historically. Here are a few reasons as to why we believe this would happen:

Marketing of petroleum products: An overview

(Oct 9, 2006)

Marketing of petroleum products is set to witness a paradigm shift. Post deregulation of the sector, private players are entitled to open new outlets provided they fulfill certain investment condition. Ever increasing need and expectations of the customer is changing the operational economics of the retail outlet. Consumers are demanding more convenience in the form of comfort, product options and fleet-monitoring services. While retail outlets are heeding to them and revamping their operations

Crude oil: Basic facts

(Sep 25, 2006)

Crude oil is the engine that propels the world economy, thus economists and analysts track its movements to see the growth trend in economy and corporate sector. Crude oil has shown great volatility in the past with it scaling highs in early 1980’s and thereafter cooling to lower levels in 1990. However recently, over the last few years, prices again shot-up, followed by the recent cooling down. In this backdrop, we analyze the major consumers and producers of crude oil and the change in demand

Refining: Understanding GRMs...

(Sep 7, 2006)

After touching historic lows in the late 1990s, the oil-refining sector has seen a significant increase in gross refining margins (GRMs) owing to two factors.

Refineries: Some key factors…

(Aug 10, 2006)

In the previous articles, we highlighted the business model and financial performance of HPCL and BPCL. Taking the same theme forward, we now move on to analyzing the historical valuation of the two companies. However, before we do that a short tutorial on key factors that affect the performance of a refining company is in order.

Energy: An eventful 2004!

(Jan 4, 2005)

The year 2004 provided investors with enough reasons to cheer with the benchmark Sensex gaining over 14% during the year, despite the infamous 'Black Monday' in May following a change in the government at the Centre. The sector that was affected the most during the year was the energy sector with elections and other political repercussions playing a major role in product pricing and therefore, the company performance. However, the major moves during the later half by the government on the polici

HPCL: Sneezes on pricing freeze

(Oct 29, 2004)

The country’s second largest refining and marketing company, HPCL has announced its 2QFY05 results. While the topline has shown a decent rise of 16% YoY, the bottomline has dipped by nearly 34% during the quarter. The operating margins have fallen by 190 basis points.

High crude prices: How it pans out?

(Oct 1, 2004)

In the face of rising crude oil prices and the resultant international product prices, the government has again deferred the impending petrol and diesel price hikes for the current fortnight. To put things in perspective, crude prices touched US$ 50 per barrel early this week and the Indian crude mix is worth 50% more than the price paid by the refineries in FY04.

HPCL v/s BPCL: Who’s the better player?

(Sep 20, 2004)

Post disinvestment blues, the government is now eyeing a ‘merger of sorts’ between oil companies with BPCL being merged with ONGC while HPCL falling into IOC’s kitty. The aim is to create substantial entry blocks for new private and international players. With over 22,000 retail outlets by the turn of this fiscal and only a 3% to 4% growth across the energy sector, this move seems to be a positive for the downstream oil marketing companies so as to sustain profitability and growth.

HPCL: Bruised but not battered

(Jul 12, 2004)

Oil stocks tumbled after the budget session, as the much-anticipated duty cuts and pricing autonomy was not granted to the oil marketing companies. At the same time came the statement that oil companies cannot be granted freedom on pricing, which actually was a dampener of sorts on the future of these companies’ operations.

Oil price hikes: An impact analysis

(Jun 16, 2004)

Oil companies, which have been crying foul over the freeze on petroleum product prices over the last six months have at least something to cheer about after yesterday's double impact announcements by Petroleum minister to hike prices along with a cut in duties of major petroleum products. Along with this announcement, the government has shown its intentions that in case tough measures are needed, it would not shy away.

GRMs: How dependable?

(Jun 7, 2004)

Oil marketing PSUs have posted robust FY04 results. BPCL recorded an 11% topline and 36% bottomline growth, while HPCL's topline grew by 6% and bottomline by 24% during the year. The performance could have been better but for the freeze on prices. The companies' refineries are amongst the best in the country and with future plans of expansion and upgradation, are likely to play a substantial role in growth.

Oil PSUs: An impact analysis

(May 17, 2004)

Crude prices are trading higher than ever before and have broken the US$ 41 per barrel barrier. It is highly unlikely that the prices of crude oil are to sober down in the foreseeable future, given the strong underlying demand from countries like US, China and India. To put things in perspective, India imports nearly 70% of its oil requirements and as per an IEA report, uses 2.5 times the crude for a unit of GDP as compared to the OECD. Given this backdrop, we assess the impact of higher crude p

HPCL: Divestment Blues

(May 14, 2004)

Political concerns coupled with increasing crude prices and a freeze on prices of petroleum products has led to a major dip in energy stocks over the past one month. One of the major losers during this period has been HPCL, which has witnessed a dip of 27% during this period. Apart from the aforementioned concerns, doubts over the disinvestment of the PSU navratna have led to such a downfall.

HPCL: On a strong footing?

(Mar 22, 2004)

Reliance and Essar Oil's entry into the retail segment of the petroleum sector is a good news for the economy. However, whether they would be successful in cornering a reasonable chunk of the market share remains to be seen, with HPCL, BPCL, IOC and IBP already established players in the business. In this article, we consider the strengths of HPCL and its future growth prospects.

Oil PSUs: What's ahead?

(Mar 19, 2004)

Oil marketing has so far been the forte of the PSUs such as IOC, BPCL, HPCL and IBP. Now, with the opening up of the downstream segment (that includes marketing of petroleum products and LPG) for the private and foreign players in the energy sector, competition is likely to reach enormous proportions with the private sector giant Reliance going all out selling its petroleum products from the Jamnagar refinery.

HPCL: Is it all about divestment?

(Sep 25, 2003)

HPCL had run up on the bourses on the hopes of divestment of government’s stake to some strategic partner. However the recent stay imposed by the Supreme Court has stalled the divestment process. This has impaired investor sentiments towards the stock as was reflected by the steep fall in the stock price recently. However should the sentiments towards the stock be solely governed by divestment? What are the prospects of the company in future? We try to take a look at the same.

PSU refineries: Missing the real picture

(Sep 17, 2003)

The Supreme Court (SC) verdict regarding the disinvestment process has dealt a severe blow to the stock market. While we would not like to debate upon the validity of the verdict, we would like to concentrate more on the fundamentals of the two companies, i.e. BPCL and HPCL.

HPCL: APM effect is fading

(Jul 31, 2003)

Hindustan Petroleum Corporation (HPCL) announced its first quarter FY04 results yesterday. The company reported a 12% rise in its topline while the bottomline was up by about 35%. Let's take a detailed look at the results.


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