IOCL’s net sales at Rs. 1,549bn in 2QFY19 increased 2.1% QoQ and 40.1% YoY. Revenues increased because of: 1) Sharp rise in average crude oil price from US$50/bbl in 2QFY18 and US $72/bbl in 1QFY19 to US$74/bbl in 2QFY19.
Given our concerns on the likely decline in GRM, increase in capex over the next five years, rise in interest costs and concerns over product pricing freedom, we expect the upside in earnings to be capped.
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