According to a report on Monday, the three oil companies may post a combined loss of Rs 10,700 cr in the June quarter.
The illustration is by Uttam Ghosh.
The report said that strong refining margins were offset by marketing losses due to petrol and diesel prices not being revised.
Most of the retail petrol and diesel sales in the country are controlled by three state-owned oil marketing companies.
They own a refinery that turns crude oil into fuel.
The marketing wing lost money from unchanged petrol and diesel prices.
The strong refining performance during the quarter was not enough to offset the losses on petrol and diesel.
"We estimate gross refining margins to remain strong at $17-18 per barrel levels (factoring in inventory loss of 0.1- 0.2 a barrel) and marketing volume growth of 17-20 per cent, thanks to continued recovery in prospects and a weaker base."
In the first quarter of FY23E, the retail losses in petrol and diesel will drive an earnings before interest, taxes, depreciation and amortization loss of Rs 6,600 crores and a net loss of Rs 10,700 crores for the OMCs.
There will be some respite for the marketing losses as a result of the decline in crude in the last few days.
The earningstrigger for FY23E will be limited due to the reduction of the delta from GRMs.
The brokerage saw a strong quarter.
It estimated a consolidated earnings before interest, taxes, depreciation, and amortization of Rs 38,900 cr/Rs 24,400 cr, which is the highest ever.
It said, "These all-time highs would come on the back of a massive 80 per cent growth in oil-to-chemical segment EBITDA, sharply higher (up 100 per cent) retail EBITDA, and EBITDA growth of 26 per cent for Reliance-Jio"
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