it was revealed that Nifty constituent BPCL and non-Nifty component HPCL are expected to contribute significantly, accounting for 31% of the incremental Nifty profits in FY24.

While the oil marketing companies (OMCs) are poised for a sharp recovery in FY24, concerns arise for FY25 as they may potentially drag down overall profits once market conditions normalize.

FY2024 Projections: – Kotak Institutional Equities assumes higher refining and marketing margins for OMCs in FY2024-26.

BPCL and HPCL, including ONGC's stake in HPCL, are anticipated to lead the way with a 23% increase in net profits for the oil, gas, and consumable fuels sector within the Nifty-50 index.

Operational Performance: – IOC reported a beat on its Ebitda estimate, driven by a better-than-expected gross refining margin (GRM) and a higher marketing margin.

BPCL's GRM exceeded Kotak's estimate, but its implied marketing margin fell below expectations.

HPCL's Q3 results missed Kotak's Ebitda estimate due to a lower-than-expected marketing margin, primarily influenced by suppressed diesel margins.

Profitability Recovery: – OMCs, HPCL and IOC, are anticipated to experience a significant profit recovery in FY2024, with Q3 profitability soaring 4.6 times compared to the year-ago quarter.

Despite not being part of the Nifty Index, these OMCs played a crucial role in the overall profitability surge.

Guidance and Outlook: – HPCL's management suggests a recovery in Q4FY24, projecting refinery throughput above 22mmtpa and marketing sales volume around 44mmtpa for the fiscal year.

BPCL's management foresees MS consumption growth at 5% over the next five years and diesel growth at 1.5-2%, even with the increasing adoption of electric vehicles.

The Mozambique force majeure is expected to be lifted by June or July 2024.