Hascol Petroleum Limited stock has been on an upward trajectory, beating the stock market index and its peer oil marketing companies. The increased investor interest has been fuelled by significantly improving operational as well as financial performance in comparison to the other players in the sector. Dealing in petrol, diesel and furnace oil, Hascol is now among the top oil marketing companies of the country in terms of volumes, and its growth has been outpacing the industry peers, increasing its market share to over 10 percent.
After a good 2016, Hascol Petroleum Limited continues to see growth in its revenues and profits in CY17 as well. For the 1HCY17, the OMC’s unconsolidated net revenues saw staggering growth of 79 percent year-on-year, which came primarily from increased volumetric sales and higher petroleum product prices. In the latest quarter (i.e. 2QCY17), the volumetric growth came from around 65 and 68 percent rise in the volumes of motor gasoline and HSD, respectively; while the price benefit came largely from over 45 percent increase in furnace oil prices during the same period. However, gross margins suffered a 100 basis point fall due to higher cost of sales (81 percent in 1HCY17).
Though Hascol’s unconsolidated earnings for 1HCY17 were up by 29 percent, year-on-year, the net margins were slight down in the first half versus similar period last year due to over 50 percent increase in selling and distribution expenses, which were up primarily due retail expansion. Hascol has added 9 pumps in 2QCY17, taking its total retail pumps to over 450.
Hascol also benefited largely from Vitol acquiring 25 percent of the company. But the growth story does not end here. It has also entered the LPG business, and applied to OGRA for LPG Marketing License.
The firm has recently disclosed the approval by the regulator. It is also working on to expand its non-fuel segment by setting up a lube blending and grease plant, which is expected to come online by 2019.
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