oil and gas - q1fy13 results preview - centrum 16072012

7/31/2019 Oil and Gas - Q1FY13 Results Preview - Centrum 16072012

1/15

Please refer to important disclosures/disclaimers in Appendix ACentrum Equity Research is available on Bloomberg, Thomson Reuters and FactSet

Rohit [email protected]

+91 22 4215 9854

Crude gives, rupee takes

Amidst the EU turmoil, crude prices crashed from a high ofUS$125/bbl to about US$90/bbl and averaged US$109/bbl during

Q1. Falling crude prices was good news from the Indianperspective but 7.5% QoQ rupee depreciation negated thepositive impact of lower crude prices. GRMs did not receive anyfillip from falling crude prices and declined further fromUS$7.7/bbl in Q4 to US$6.7/bbl in Q1. Despite lower crude prices,Q1 under-recoveries still remained high at Rs445bn owing torupee depreciation. Government raised petrol prices during Q1but the decision on diesel (possibly LPG) price hike is pending andis expected only post presidential elections. Devoid ofgovernment support in Q1, OMCs will report losses, but upstreamwill report relatively better performance. Gas utilities are likely tobe a mixed bag. Cairn is likely to benefit from rupee and forexgains while RILs petchem and refining performance will be betteron a QoQ basis.

Crude declines and averages at US$109/bbl: EU turmoil alongwith weaker gasoline demand in the US and rising crudestockpiles led to a free fall in crude prices from a high of aboutUS$125/bbl to US$90/bbl during Q1. Crude thus averagedUS$109/bbl while currently hovering around US$100/bbl.

Lower gasoline and naphtha cracks impact GRMs: Lowergasoline demand in the US led to gasoline cracks falling to singledigit from mid-teens. Simultaneously, lower petchem demandfrom China and higher availability from the Middle-East sentnaphtha prices plummeting. Hence, despite widening light-heavy and sweet-sour differentials, GRMs declined sequentially.Reuters Singapore Complex GRMs thus averaged lower QoQ atUS$6.7/bbl in Q1 compared to US$7.7/bbl in Q4FY12.

Under-recoveries still remain high at Rs445bn: Rupee played aspoil sport amidst lower crude prices thus keeping under-

recoveries high at Rs445bn. OMCs in red, upstream to fare better: Devoid of government

compensation, OMCs are likely to report losses. ONGC and OILare expected to report better numbers due to higher netrealisation and favourable exchange rate but the statutory dutiesare likely to rise owing to higher cess (from Rs2,500/ton toRs4,500/ton). Decline in gas demand is likely to affect Petronet,GAIL and Gujarat Gas while lower domestic availability is likely toaffect GSPL. Though IGL is likely to report volume growth, itwould be under pressure due to rupee depreciation. Cairn islikely to benefit from favourable exchange rate both from cruderealisations and from forex gains. RILs refining and petchemsegments are expected to benefit from rupee depreciation whileE&P still remains a dampener. We remain positive on Cairn owingto high crude prices and the likely ramp-up in crude productionand on Petronet LNG due to favourable domestic demand amidstlowering spot LNG prices and increasing availability.

Price Performance (%)*

1M 6M 1Yr

BPCL 5.6 52.0 15.6

CAIRN (1.8) (5.9) 0.1GAIL 7.6 (2.7) (21.7)

GGAS 0.6 (19.1) (21.1)

GSPL 6.5 (11.4) (31.4)

HPCL 16.2 38.0 (12.8)

IGL 0.4 (30.6) (38.4)

IOCL 10.4 1.5 (20.7)

OIL 5.1 4.7 (6.4)

ONGC 6.1 9.8 (0.6)

PLNG 9.0 (5.5) 2.5

RIL 0.3 (1.8) (17.0)

Nifty Index 2.1 7.4 (6.4)

*as on 13 July 2012

Source: Bloomberg, Centrum Research

Summary Estimates

Net Sales EBITDA EBITDA (%) PAT

Y/E Mar (Rsmn) Q1FY13E YoY (%) QoQ (%) FY13E Q1FY13E YoY (%) QoQ (%) FY13E Q1FY13E Q1FY12 Q1FY13E YoY (%) QoQ (%) FY13E

BPCL 532,506 15.4 (17.7) 2,287,332 (30,020) 38.7 - 40,616 (5.6) (4.7) (35,870) 40.0 - 10,960

Cairn India Ltd 41,115 10.7 12.6 203,402 30,936 (2.0) 14.6 122,007 75.2 85.0 29,234 7.2 33.7 77,909

GAIL India Ltd 113,493 27.7 8.2 348,407 15,113 (4.2) 96.9 47,492 13.3 17.7 9,002 (8.6) 86.2 34,946

Gujarat Gas Co Ltd 7,195 23.0 (0.6) 32,307 997 (28.9) 30.4 4,479 13.9 24.0 662 (31.2) 2.0 2,908

Gujarat State Petronet Ltd 2,736 (4.9) (1.8) 10,297 2,499 (5.8) (1.8) 9,325 91.3 92.2 1,256 (8.6) (2.9) 4,271

HPCL 529,709 29.5 1.0 2,042,785 (32,573) 26.8 - 39,531 (6.1) (6.3) (40,123) 30.3 - 8,048

Indian Oil Corp Ltd 1,329,745 31.3 3.5 4,832,307 (47,877) 157.2 - 195,790 (3.6) (1.8) (64,277) 72.8 - 75,803

Indraprastha Gas Ltd 7,530 40.1 4.4 34,742 1,605 1.4 (4.6) 6,794 21.3 29.5 735 (8.2) (8.1) 3,278

Oil & Natural Gas Corp Ltd 185,127 12.9 (4.3) 1,511,846 105,850 11.8 (8.6) 487,807 57.2 57.7 50,238 22.7 (11.0) 208,187Oil India Ltd 26,938 13.8 49.5 89,046 13,538 9.1 139.7 46,197 50.3 52.5 9,168 7.9 106.1 22,261

Petronet LNG Ltd 66,810 44.5 4.8 230,869 4,261 (2.7) 0.7 18,530 6.4 9.5 2,479 (3.5) 1.1 9,908Reliance Industries Ltd 970,518 19.8 13.9 3,683,496 72,038 (27.4) 9.8 321,129 7.4 12.3 43,224 (23.6) 2.0 211,288

Source: Company, Centrum Research Estimates; Gujarat Gas quarterly numbers for Q2CY12E

16 July 2012

Q1FY13 Results Preview

INDIA

Oil & Gas


2/15

2 Oil & Gas

Crude softens to US$100/bbl

Exhibit 1: Brent Crude prices Exhibit 2: OPEC crude basket

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Brent Quarterly avg.

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OPEC Crude Basket Quarterly Average

Source: Bloomberg, Centrum Research Source: Bloomberg, Centrum Research

Exhibit 3: Indian crude basket Exhibit 4: OPEC and Non-OPEC crude production

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Indian crude oil basket Quarterly avg.

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55

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(mbpd)

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Non OPEC Producti on (LHS) OPEC Crude Production( RHS)



3/15

3 Oil & Gas

GRMs decline to US$6.7/bbl due to weak gasoline and naphthacracks

Exhibit 5: Reuters Singapore Complex GRMs

(2)

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(US$/bbl)

Singapore GRMs Qtrly. Avg.

Source: Reuters, Centrum Research

Exhibit 6: Petroleum product prices Exhibit 7: Petroleum product crack spreads

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8

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(US$/ bbl)

Gasoline Diesel Jet Kerosene Fuel Oil Naphtha

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Gasoline - Crude Spread Diesel - Crude Spread Jet Kerosene - Crude Spread

Fuel Oil - Crude Spread Naphtha - Crude Spread


Light-heavy and sweet-sour differentials expand

Exhibit 8: Arab light-heavy spread

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Arab Light-Heavy Differential Qtrly. Avg. Source: Bloomberg, Centrum Research


4/15

4 Oil & Gas

Exhibit 9: WTI-WTS sweet-sour spread

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WTI-WTS Sweet-Sour Differential Qtrly. Avg.


Petchem margins expand owing to decline in naphtha prices

Exhibit 10: Petchem product prices

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600800

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(US$/ton)

Naphtha HDPE LDPE PP PVC


Exhibit 11: Petchem product spreads

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(US$/ton)

HDPE-Naphtha PP-Naphtha LDPE-Naphtha PP-Propylene



5/15

5 Oil & Gas

Despite lower crude prices, rupee depreciation keeps Q1 under-recoveries high at about Rs450bn

Exhibit 12: Subsidy sharing

4233 32 32

39 40 40 38 33

49

46

6956 45

60 6056

59

1021

12 15 0 0 6 8

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100

FY07 FY08 FY09 FY10 FY11 FY12 FY13E FY14E FY15E

Upstream Oil bonds/ cash Absorption

(%)

Source: Company, Centrum Research Estimates

Exhibit 13: Total under-recoveries

771

1,033

461

782

1,385

445

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1,600

FY08 FY09 FY10 FY11 FY12 Q1FY13E

(Rsbn)



6/15

6 Oil & Gas

BPCL (Rating Buy; Target Price Rs452)

Exhibit 14: Q1FY13 Estimates

BPCL Q1FY13E Q1FY12 YoY (%) Q4FY12 QoQ (%)

Sales (Rsmn) 532,506 461,396 15.4 646,689 (17.7)

EBITDA(Rsmn) (30,020) (21,642) - 50,838 -

EBITDA (%) (5.6) (4.7) 7.9

PAT(Rsmn) (35,870) (25,619) - 39,628 -

PAT (%) (6.7) (5.5) 6.1

EPS (99.2) (70.9) 109.6

Crude throughput (mmt) 5.6 5.2 7.7 6.0 (6.7)

Market sales (mmt) 7.6 7.8 (2.9) 8.2 (7.7)

Upstream Subsidies( Rsmn) 35,025 34,091 2.7 43,337 (19.2)


Cairn India (Rating Buy; Target Price Rs390)

Post government approval in April, Cairn raised its Mangala output from 125,000bpd to150,000bpd. With incremental production from Mangala, the cumulative output has reached175,000bpd while the average output during Q1 is expected at 167,000bpd.

Crude prices averaged lower during the quarter but rupee depreciation is likely to benefitCairns revenues and earnings.

However, higher cess payment would inflate the statutory levies.Exhibit 15: Q1FY13 Estimates

CAIRN Q1FY13E Q1FY12 YoY (%) Q4FY12 QoQ (%)

Sales(Rsmn) 41,115 37,127 10.7 36,513 12.6

EBITDA(Rsmn) 30,936 31,553 (2.0) 26,994 14.6

EBITDA (%) 75.2 85.0 73.9

PAT(Rsmn) 29,234 27,266 7.2 21,862 33.7

PAT (%) 61.9 72.4 58.4

EPS 15.4 14.3 11.5

MBA net production(bpd) 167,000 125,127 33.5 137,634 21.3

MBA Crude Realisation(US$/bbl) 98.1 104.5 (6.1) 96.2 2.0



7/15

7 Oil & Gas

GAIL (Rating Neutral; Target Price Rs373)

GAILs gas transmission volumes are expected to remain flattish at 116mmscmd during Q1. Sequential decline in subsidy sharing at Rs8.9bn (Rs14.0bn in Q4FY12) would benefit GAILs

performance.

Though Petchem prices were stable in dollar terms; rupee depreciation will benefit Petchemsegment performance.


GAIL Q1FY13E Q1FY12 YoY (%) Q4FY12 QoQ (%)

Sales(Rsmn) 113,493 88,890 27.7 104,884 8.2

EBITDA(Rsmn) 15,113 15,772 (4.2) 7,677 96.9

EBITDA (%) 13.3 17.7 7.3

PAT(Rsmn) 9,002 9,847 (8.6) 4,833 86.2

PAT (%) 7.9 11.0 4.5

EPS 7.1 7.8 3.8

Nat. gas trans. (mmscmd) 116.0 117.2 (1.0) 115.6 0.3

LPG Transmission (TMT) 880.0 817.0 7.7 879.0 0.1

Petchem, LPG etc. (TMT) 390 356 9.6 393 (0.8)

Nat. gas trans. EBITDA 4,750 7,550 (37.1) 4,550 4.4

LPG Transmission EBITDA 715 810 (11.7) 680 5.1

Petchem EBITDA 7,965 2,860 178.5 4,760 67.3

Nat. gas trading EBITDA 2,580 3,130 (17.6) 1,680 53.6

Subsidy sharing 8,943 6,819 31.1 13,980 (36.0)


Gujarat State Petronet (Rating Neutral; Target Price Rs74)

Further decline in RIL KG D6 volumes would impact GSPLs transmission volumes marginallyand is expected to average at 30.5mmscmd.

Transmission tariffs are expected to remain high above Rs900/000scm due to the take-or-paycomponent.


GSPL Q1FY13E Q1FY12 YoY (%) Q4FY12 QoQ (%)

Sales(Rsmn) 2,736 2,876 (4.9) 2,788 (1.8)

EBITDA(Rsmn) 2,499 2,652 (5.8) 2,544 (1.8)

EBITDA (%) 91.3 92.2 91.3

PAT(Rsmn) 1,256 1,374 (8.6) 1,293 (2.9)

PAT (%) 43.7 46.5 44.1

EPS 2.2 2.4 2.3

Trans. volumes (mmscmd) 30.5 36.8 (17.0) 31.1 (1.9)

Avg. trans.Tariff (Rs/ 000scm) 950.0 813.1 16.8 956.3 (0.7)



8/15

8 Oil & Gas

Gujarat Gas (Rating Sell; Target Price Rs277)

Demand decline is expected to lead to sequential decline in distribution volumes at3.1mmscmd.

Average realisations are likely to go up due to price hike in the industrial retail segment. Gas sourcing cost is likely to jump due to rupee depreciation thus impacting operating margins

and earnings.


Gujarat Gas Q1FY13E Q1FY12 YoY (%) Q4FY12 QoQ (%)

Sales(Rsmn) 7,195 5,852 23.0 7,240 (0.6)

EBITDA(Rsmn) 997 1,403 (28.9) 765 30.4

EBITDA (%) 13.9 24.0 10.6

PAT(Rsmn) 662 963 (31.2) 649 2.0

PAT (%) 9.1 16.1 8.6

EPS 5.1 7.5 5.0

Gas sales (mmscmd) 3.1 3.3 (6.0) 3.3 (6.6)

Avg. dist. Rate (Rs/scm) 25.0 19.1 30.9 23.5 6.4


HPCL (Rating Neutral; Target Price Rs351)


HPCL Q1FY13E Q1FY12 YoY (%) Q4FY12 QoQ (%)

Sales(Rsmn) 529,709 409,169 29.5 524,431 1.0

EBITDA(Rsmn) (32,573) (25,684) - 55,162 -

EBITDA (%) (6.1) (6.3) 10.5

PAT(Rsmn) (40,123) (30,803) - 46,310 -PAT (%) (7.6) (7.5) 8.8

EPS (118.5) (91.0) 136.8

Crude throughput (mmt) 4.0 4.0 0.8 4.0 1.0

Market sales (mmt) 7.3 7.3 (0.3) 7.7 (6.2)

Upstream Subsidies(Rsmn) 32,790 31,668 3.5 40,000 (18.0)



9/15

9 Oil & Gas

Indraprastha Gas (Rating Under review)

Benefit of CNG price hike affected in Q4FY12 would benefit IGL in Q1, but rupee depreciation islikely to take away the entire benefit and impact margins.

CNG volumes are likely to be flattish QoQ but PNG volumes are likely to remain buoyant.Exhibit 20: Q1FY13 Estimates

IGL Q1FY13E Q1FY12 YoY (%) Q4FY12 QoQ (%)

Sales(Rsmn) 7,530 5,374 40.1 7,212 4.4

EBITDA(Rsmn) 1,605 1,583 1.4 1,683 (4.6)

EBITDA (%) 21.3 29.5 23.3

PAT(Rsmn) 735 801 (8.2) 800 (8.1)

PAT (%) 9.7 14.9 11.1

EPS 5.3 5.7 5.7

CNG (mn kgs) 181 161 12.2 180 0.6

PNG (mmscm) 80.3 64.8 24.0 78.0 3.0

CNG (Rs/ kg) 35.5 29.1 22.0 34.0 4.3

PNG (Rs/ scm) 24.0 19.6 22.5 23.8 0.6


IOCL (Rating Neutral; Target Price Rs270)


IOCL Q1FY13E Q1FY12 YoY (%) Q4FY12 QoQ (%)

Sales(Rsmn) 1,329,745 1,012,845 31.3 1,284,440 3.5

EBITDA(Rsmn) (47,877) (18,618) - 147,487 -

EBITDA (%) (3.6) (1.8) 11.5

PAT(Rsmn) (64,277) (37,187) - 126,704 -

PAT (%) (4.8) (4.0) 9.8

EPS (26.5) (15.3) 52.2

Crude throughput (mmt) 14.2 14.3 (0.7) 14.1 0.7

Market sales (mmt) 19.2 19.3 (0.3) 19.4 (1.1)

Upstream Subsidies(Rsmn) 81,229 79,323 2.4 94,301 (13.9)



10/15

10 Oil & Gas

ONGC (Rating Buy; Target Price Rs313)

Although we factor in upstream sharing at 40% in FY13E, sharing in Q1 is likely to remain at33.5% thus keeping net realisations at US$47.4/bbl.

Statutory levies are expected to go up due to the increase in cess from Rs2,500/ton earlier toRs4,500/ton.


ONGC Q1FY13E Q1FY12 YoY (%) Q4FY12 QoQ (%)

Sales(Rsmn) 185,127 164,013 12.9 193,392 (4.3)

EBITDA(Rsmn) 105,850 94,700 11.8 115,771 (8.6)

EBITDA (%) 57.2 57.7 59.9

PAT(Rsmn) 50,238 40,949 22.7 56,444 (11.0)

PAT (%) 25.3 24.2 28.5

EPS 5.9 4.8 6.6

Crude Sales(MMT) 5.59 5.69 (1.7) 6.49 (13.9)

Gas Sales(BCM) 0.44 0.50 (11.8) 0.48 (7.5)

Crude Gross Realisation(US$/bbl) 112.0 121.3 (7.7) 121.6 (7.9)Crude Net Realisation(US$/bbl) 47.4 48.8 (2.8) 44.3 6.9

Subsidy Sharing 120,460 120,460 - 141,700 (15.0)


Oil India (Rating Buy; Target Price Rs568)

Although we factor in upstream sharing at 40% in FY13E, sharing in Q1 is likely to remain at33.5% thus keeping net realisations at US$56.0/bbl.

Statutory levies are expected to go up due to the increase in cess from Rs2,500/ton earlier toRs4,500/ton.


Oil India Q1FY13E Q1FY12 YoY (%) Q4FY12 QoQ (%)

Sales(Rsmn) 26,938 23,661 13.8 18,021 49.5

EBITDA(Rsmn) 13,538 12,412 9.1 5,647 139.7

EBITDA (%) 50.3 52.5 31.3

PAT(Rsmn) 9,168 8,496 7.9 4,448 106.1

PAT (%) 30.5 31.8 20.8

EPS 38.1 35.3 18.5

Crude Sales(MMT) 0.96 0.97 (0.7) 0.97 (1.0)

Gas Sales(BCM) 0.68 0.64 6.1 0.64 6.4

Crude Gross Realisation(US$/bbl) 110.5 116.3 (5.0) 119.7 (7.7)

Crude Net Realisation(US$/bbl) 56.0 59.6 (5.9) 38.9 43.9

Subsidy Sharing 17,807 17,807 - 28,737 (38.0)



11/15

11 Oil & Gas

Petronet LNG (Rating Buy; Target Price Rs177)

PLNGs re-gasification volumes are expected to improve QoQ due to demand revival in May andJune.

Lower margins on spot LNG is likely to keep blended re-gasification margins lower atRs36.0/mmbtu against Rs36.7/mmbtu in Q4FY12.


Petronet Q1FY13E Q1FY12 YoY (%) Q4FY12 QoQ (%)

Sales(Rsmn) 66,810 46,233 44.5 63,754 4.8

EBITDA(Rsmn) 4,261 4,381 (2.7) 4,230 0.7

EBITDA (%) 6.4 9.5 6.6

PAT(Rsmn) 2,479 2,568 (3.5) 2,451 1.1

PAT (%) 3.7 5.5 3.8

EPS 3.3 3.4 3.3

Regasification vol. (TBTUs) 139.0 133.4 4.2 134.5 3.3

Blended regas. Margins(Rs/mmbtu) 36.0 36.8 -1.9 36.7 (1.8)

EBITDA/Ton(Rs) 1,563 1,675 (6.7) 1,604 (2.5)

Contracted LNG (TBTUs) 119.0 114.7 3.8 119.5 (0.4)

Spot LNG (TBTUs) 20.0 18.7 6.8 15.0 33.3


Reliance Industries (Rating Buy; Target Price Rs819)

Although crude prices declined in Q1, GRMs declined primarily due to pressure on gasoline andnaphtha prices. Benchmark Singapore Complex GRMs contracted to US$6.7/bbl during Q1 fromUS$7.7/bbl in Q4FY12. RIL is expected to report better than benchmark GRMs due to wideningof sweet-sour and light-heavy differentials.

Petchem performance is likely to be better QoQ primarily due to rupee depreciation. RILs KG D6 gas production further declined during the quarter and is likely to average

32mmscmd.

RILs interest burden is likely to go up QoQ due to rupee depreciation.Exhibit 25: Q1FY13 Estimates

RIL Q1FY13E Q1FY12 YoY (%) Q4FY12 QoQ (%)

Sales(Rsmn) 970,518 810,180 19.8 851,820 13.9

EBITDA(Rsmn) 72,038 99,260 (27.4) 65,630 9.8

EBITDA (%) 7.4 12.3 7.7

PAT(Rsmn) 43,224 56,610 (23.6) 42,360 2.0

PAT (%) 4.4 6.9 4.8

EPS 13.2 17.3 13.0

GRMs (US$/bbl) 7.0 10.3 (32.0) 7.6 (7.9)Crude Throughput 17.0 17.0 - 16.3 4.3

KG D6 gas production (mmscmd) 32.0 48.0 (33.3) 35.5 (9.9)

Refining EBIT(Rsmn) 18,484 31,990 (42.2) 16,960 9.0

Petchem EBIT(Rsmn) 24,036 22,150 8.5 21,740 10.6

E&P EBIT(Rsmn) 10,631 14,730 (27.8) 9,510 11.8



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12 Oil & Gas

Exhibit 26: Sector valuation snapshot

Rating# CMP (Rs)TargetPrice

Upside/Downside (%) P/BV (x) PE (x) EV/E (x) EPS (Rs) ROE (%) RoCE (%)

BPCL Buy 387 452 16.8 0.9 12.8 11.5 30.3 7.2 6.8

Cairn India Ltd Buy 316 390 23.4 1.1 8.1 4.6 38.8 14.3 17.3

GAIL India Ltd Neutral 363 373 2.7 1.9 13.2 9.5 27.5 15.3 12.2

Gujarat Gas Co Ltd Sell 313 277 (11.5) 3.9 15.2 9.1 20.6 27.1 19.5Gujarat State Petronet Ltd Neutral 71 74 3.8 1.5 6.4 5.3 11.1 12.4 41.8

HPCL Neutral 350 351 0.2 4.7 4.7 9.1 75.3 0.4 6.0

Indraprastha Gas Ltd Under review 243 - - 0.0 10.4 6.8 23.4 24.8 25.6

Indian Oil Corp Ltd Neutral 271 270 (0.5) 1.1 8.7 5.7 31.2 12.6 9.6

Oil India Ltd Buy 481 568 18.0 1.6 13.0 3.4 37.0 12.3 11.6

Oil & Natural Gas Corp Ltd Buy 285 313 9.8 1.7 7.7 4.5 37.1 22.1 12.4

Petronet LNG Ltd Buy 148 177 19.6 2.6 11.2 6.3 13.2 25.5 14.2

Reliance Industries Ltd Neutral 719 819 14.0 1.3 11.0 8.9 65.2 12.2 9.5

Note: # FY13E Estimates; Prices as on 13 July 2012

Gujarat Gas estimates for CY12E



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Appendix A

Disclaimer

Centrum Broking Limited (Centrum) is a full-service, Stock Broking Company and a member of The Stock Exchange, Mumbai (BSE) and National Stock Exchangeof India Ltd. (NSE). Our holding company, Centrum Capital Ltd, is an investment banker and an underwriter of securities. As a group Centrum has InvestmentBanking, Advisory and other business relationships with a significant percentage of the companies covered by our Research Group. Our research professionalsprovide important inputs into the Group's Investment Banking and other business selection processes.

Recipients of this report should assume that our Group is seeking or may seek or will seek Investment Banking, advisory, project finance or other businesses andmay receive commission, brokerage, fees or other compensation from the company or companies that are the subject of this material/report. Our Company andGroup companies and their officers, directors and employees, including the analysts and others involved in the preparation or issuance of this material and theirdependants, may on the date of this report or from, time to time have "long" or "short" positions in, act as principal in, and buy or sell the securities or derivativesthereof of companies mentioned herein. Centrum or its affiliates do not own 1% or more in the equity of this company Our sales people, dealers, traders and otherprofessionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressedherein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein.We may have earlier issued or may issue in future reports on the companies covered herein with recommendations/ information inconsistent or different thosemade in this report. In reviewing this document, you should be aware that any or all of the foregoing, among other things, may give rise to or potential conflicts ofinterest. We and our Group may rely on information barriers, such as "Chinese Walls" to control the flow of information contained in one or more areas within us, orother areas, units, groups or affiliates of Centrum. Centrum or its affiliates do not make a market in the security of the company for which this report or any reportwas written. Further, Centrum or its affiliates did not make a market in the subject companys securities at the time that the research report was published.

This report is for information purposes only and this document/material should not be construed as an offer to sell or the solicitation of an offer to buy, purchase orsubscribe to any securities, and neither this document nor anything contained herein shall form the basis of or be relied upon in connection with any contract orcommitment whatsoever. This document does not solicit any action based on the material contained herein. It is for the general information of the clients ofCentrum. Though disseminated to clients simultaneously, not all clients may receive this report at the same time. Centrum will not treat recipients as clients byvirtue of their receiving this report. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations,or needs of individual clients. Similarly, this document does not have regard to the specific investment objectives, financial situation/circumstances and theparticular needs of any specific person who may receive this document. The securities discussed in this report may not be suitable for all investors. The securitiesdescribed herein may not be eligible for sale in all jurisdictions or to all categories of investors. The countries in which the companies mentioned in this report areorganized may have restrictions on investments, voting rights or dealings in securities by nationals of other countries. The appropriateness of a particularinvestment or strategy will depend on an investor's individual circumstances and objectives. Persons who may receive this document should consider andindependently evaluate whether it is suitable for his/ her/their particular circumstances and, if necessary, seek professional/financial advice. Any such person shallbe responsible for conducting his/her/their own investigation and analysis of the information contained or referred to in this document and of evaluating themerits and risks involved in the securities forming the subject matter of this document.

The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significantuncertainties and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on whichthe projections and forecasts were based will not materialize or will vary significantly from actual results, and such variances will likely increase over time. Allprojections and forecasts described in this report have been prepared solely by the authors of this report independently of the Company. These projections andforecasts were not prepared with a view toward compliance with published guidelines or generally accented accounting principles. No independent accountantshave expressed an opinion or any other form of assurance on these projections or forecasts. You should not regard the inclusion of the projections and forecastsdescribed herein as a representation or warranty by or on behalf of the Company, Centrum, the authors of this report or any other person that these projections orforecasts or their underlying assumptions will be achieved. For these reasons, you should only consider the projections and forecasts described in this report after

carefully evaluating all of the information in this report, including the assumptions underlying such projections and forecasts.

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This report has not been prepared by Centrum Securities LLC. However, Centrum Securities LLC has reviewed the report and, in so far as it includes current orhistorical information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed.

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The opinions and projections expressed herein are entirely those of the author and are given as part of the normal research activity of Centrum Broking and are

given as of this date and are subject to change without notice. Any opinion estimate or projection herein constitutes a view as of the date of this report and therecan be no assurance that future results or events will be consistent with any such opinions, estimate or projection.


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This document has not been prepared by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or any of its directorsor any other person. Information in this document must not be relied upon as having been authorized or approved by the company or its directors or any otherperson. Any opinions and projections contained herein are entirely those of the authors. None of the company or its directors or any other person accepts anyliability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in connection therewith.

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As per the declarations given by them, Mr. Rohit Nagraj, research analyst and and/or any of his family members do not serve as an officer, director or any wayconnected to the company/companies mentioned in this report. Further, as declared by him, he has not received any compensation from the above companies inthe preceding twelve months. Our entire research professionals are our employees and are paid a salary. They do not have any other material conflict of interestof the research analyst or member of which the research analyst knows of has reason to know at the time of publication of the research report or at the time of thepublic appearance.

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Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulationsand/or Centrum policies, in circumstances where Centrum is acting in an advisory capacity to this company, or any certain other circumstances

Key to Centrum Investment Rankings:

Stock to Sector Sector to Market Stock to Market

Outperform Buy

Neutral BuyOutperform

Underperform Accumulate

Outperform Neutral

Neutral NeutralNeutral

Underperform Neutral

Outperform Reduce

Neutral SellUnderperform

Underperform Sell

Accumulate: Add on decline; Reduce: Sell on rise

Stock to Sector This is the relative rating of the stock to the sector and reflects its relative attractiveness vis--vis other coverage stocks in the sector. Sector to Market This is the relative rating of the sector vis--vis the other sectors in the coverage space. This is derived based on the conviction of the

analyst on a sector and macro view outlined in market strategy.

Stock to Market The final rating on the stock is obtained as a combination of the stock to sector and sector to market view as outlined in the table above.


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Registration Nos.

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CDSL DP ID: 12200. SEBI REGISTRATION NO.: IN-DP-CDSL-20-99

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oil and gas - q1fy13 results preview - centrum 16072012

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