The oil marketing companies (OMC) are in favour post the Morgan Stanley report saying they find valuation of these companies attractive and marketing margins for the companies are up.
MK Surana, CMD, HPCL is confident of posting healthy margins in the fourth quarter.
He said, right now the cracks are good for the OMCs because crude is off from its peak and it is Asian refinery shut down period. The gasoline and gas oil cracks are good and would continue to do well going forward, he added.
According to him, gasoline cracks would likely to be in range of USD 13-14 and gas oil cracks in range of USD 14-16.
With regards to crude prices he said they have stable for some time now and expect them to remain so through March on back of strong compliances from OPEC, strong supplies from the US and Asian refineries shut down helping keep demand in check.
However, in Q2CY18, the demand is expected to improve because Asian refineries will start, driving season will be back, Ramadan season etc.He is also upbeat on the margin front because the gross refining margins and marketing margins for the company have been good.
Volumes also have been good on back of strong demand, he said. From April to February, MS has seen 10.5 percent growth, while diesel and LPG volumes have grown 8 percent. Therefore, altogether volume growth has been in range of 6.5 percent till date, in FY18.
Talking about the merger with ONGC, he said both the companies are working out synergies and MRPL is one of the items. However, right now it would be premature to define the contours of the merger, he added.