Q1 Results Review: OMCs report higher profit on soft oil prices, improved volumes; mixed results for CGDs

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reported a growth of 102 per cent in net profit in the June quarter, but Reliance Industries witnessed a decline on net profit on weaker oil-to-chemicals (O2C) business, despite steady growth in retail and telecom arms. The diversified conglomerate's O2C's revenue declined 17.7 per cent at ₹1,33,031 crore in the quarter-under-review, compared to ₹1,61,715 crore in the year-ago period.

Reliance said the lower O2C revenue was ‘’primarily on account of sharp reduction in crude oil prices and lower price realisation of downstream products. This was partially offset by higher volumes.'' The country's largest refiner - Indian Oil - reported a standalone net profit of ₹13,750.44 crore in the June quarter, while operational performance improved as earnings before interest, taxes, depreciation and amortization (EBITDA) increased 44.5 per cent sequentially to ₹22,163 crore.

The average Gross Refining Margin (GRM) for the period April- June 2023 was $8.34 per bbl. Domestic brokerage frim Motilal Oswal said in its Q1 results review report that the oil and gas sector so far has reported mixed results.

‘’The underperformance of Reliance Industries has been led by weak transportation fuel cracks and lower downstream chemical margins," said Motilal Oswal. Meanwhile, leading city gas distributers (CGDs) including Indraprastha Gas, Petronet LNG, Mahanagar Gas, GAIL also reported mixed results.

Brokerages had estimates that the companies will report steady growth in terms of margins and volumes due to reduction in administrative price mechanism (APM) gas prices. Indraprastha Gas reported a consolidated net profit of ₹522 crore for the June quarter, which was an increase of 8.47 per cent from ₹481.2 crore clocked in the corresponding