Petroleum sales after debt clearance

A major impact of liquidity injection is on consumption. And these signs have begun to show in domestic petroleum sales in the fiscal year to date. And more than just the governments attempt to wipe out the debt woes of energy sector, the drive towards gradual phase out of gas consumption in transport sector, and tariff rationalisation have also yielded strength to petroleum consumption in the country.
A glance at the cumulative volumes sold by oil marketing companies during the first two months of FY14 shows what was expected to happen after the injection of liquidity in June 2013: The most expensive of the fuels, and still widely used in the power sector, furnace oil off-take was expected to see a jump as power producers sat with bellies replenished with cash.
This is exactly what has happened; furnace oil off-take jumped by more than 11 percent year on year in 2M FY14 and by a hefty 28 percent year on year in August due to higher utilization by the power sector.
Though this might help in keeping the power shortfall under check for the time being increased furnace oil sales is certainly not a sustainable option. If reforms kick in true spirit, the consumption of furnace oil for power generation should lose steam, or else the debt devil would start its meteoric growth once again.
The growth trend in motor gasoline volumes, commonly known as petrol, is a good sign for conversion from CNG to the former as frequent CNG shutdowns have forced motorists to run on petrol. During the first two months of FY14, rise in motor gasoline sales has been around 13 percent year on year, and over 18 percent year on year in August 2013 alone.
However, the sales of high speed diesel, another major petroleum product used mostly in agriculture and transport sector, did not rebound. In 2M FY14, HSD volumes went down by five percent year on year, while month-on-month comparison shows a 30 percent decline in sales volumes which is largely attributed to reduced irrigation requirement by the agriculture sector during the floods and monsoon season.
Other corporate results

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Shifa International Hospital Ltd

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Rs(mn)                  FY13      FY12        Chg

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Net Revenue             5316      4452        19%

Other income              41        15       174%

Operating cost          4526      3945        15%

Profit before tax        540       371        46%

Profit after tax         388       261        49%

EPS (Rs)                7.68      5.16     48.84%

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