While gross refining margins (GRM) of public sector oil refining companies (OMC) will be determined by the movement in global crude oil movements, analysts say that the current fiscal year may see GRMs improving and OMCs’ credit profiles taking a turn for the better. However, this improving trend is likely to be largely mitigated by increased investment.
According to a research note from ratings agency India Ratings and Research (Ind-Ra), OMC credit profiles will improve marginally in FY20 driven by higher EBITDA generation on account of better gross refining margins (GRM) and a reduction in subsidy receivables from the government.
“Ind-Ra further expects subsidy receivables to streamline and reduce with the Government of India’s (GoI) likely higher petroleum subsidy budget allocation for FY20,” the note said Read more
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