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【出版时间及名称】：2010年5月印度石油化工行业研究报告
【作者】：野村证券
【文件格式】：pdf
【页数】：56
【目录或简介】：
Action
We have revised our oil price forecasts to US$90 per barrel for FY11F, US$100 for
FY12F and US$110 for FY13F, up by US$18, US$25 and US$35 per barrel. Higher
oil prices increase fuel under-recoveries, which is negative for public sector oil
companies. We prefer private players Cairn India and Reliance Industries. We
reiterate our BUY on GAIL, though subsidies are a big concern. We cut ONGC to
NEUTRAL and reaffirm our REDUCE calls on oil marketing companies.
Catalysts
Tightening fundamentals, a weakening US dollar, potentially higher inflation
expectations and abundant money supply should all likely lead to higher oil prices.
Anchor themes
Investors’ forward-looking nature could push prices ahead of fundamentals. We
believe oil prices will cross US$100/bbl next year and see significant upside to our
price forecasts based on current demand and supply fundamentals.
India — oil is not well
US$100 oil — subsidy problem will continue to haunt sector
Since the UPA government took office in May 2009, it has made several
statements about reforming petroleum product pricing, the subsidy mechanism and
auto fuel deregulation. While it set up another committee whose report suggested
drastic measures, no meaningful action, in our view, has yet been taken. Over the
past year, when oil prices were benign, it would have been easier to bring about
changes, in our view. At current prices, however, changes seem unlikely. With
sharp political protests and a cut motion tabled in Parliament on price increases,
any further price hike seems unlikely near term. The subsidy size was only
US$10bn for FY10, yet there is still no clarity on who will pay the US$4bn balance
in cooking fuel losses. We estimate the problem will reach US$22bn in FY11F (up
111% y-y) and US$24bn in FY12F (even assuming a 10% transport fuel price rise).
It’s difficult to like oil PSUs; downgrade ONGC to NEUTRAL
The product price-setting and subsidy-sharing mechanisms both remain ad hoc
and non-transparent. As the amounts are large, the potential financial impact on oil
PSUs is significant, making forecasting these companies’ earnings (or losses) very
difficult. Oil PSUs continue to demand clarity, but see no large-scale policy
changes in the near term. We reiterate our REDUCE on oil marketing companies
(OMCs) HPCL, BPCL and IOC. We think ONGC looks attractive on valuation and
could benefit from gas price increases, but its subsidy problem is a big concern —
it could, in our view, end up bearing the greatest burden. We downgrade ONGC to
NEUTRAL from Buy. We still like GAIL (BUY) for its operating upside and re-rating
potential from gas growth, but we see its subsidy as a big unknown and a concern.
We prefer private plays — Cairn India and Reliance Industries
Unlike oil PSUs, higher oil prices are positive for private players. We continue to
like Cairn India (reiterate BUY and raise PT to INR370), the only pure oil play.
Apart from current developments in Mangala, Bhagyam & Aishwariya (MBA),
where production is ramping up, we still look for further upside in the Rajasthan
block. We like Reliance Industries (reaffirming BUY) for its scope for a significant
earnings increase, receding concerns and exploration upside
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