Oil firms to raise diesel imports
July 31, 2008, 0:00 IST
IOCL, BPCL, HPCL may buy 3.5 mt from
Indian Oil abroad to meet demand
Indian Oil Corporaton (IOCL), the nation’s biggest refiner, and its state-run counterparts may import 3.5 million tonnes of diesel in the year ending March 2009 to meet demand for the fuel.
IOCL, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) imported 2.93 million tonnes of diesel in the last financial year, making good the shortfall in supply created by increased exports from Reliance Industries’ Jamnagar refinery in Gujarat.
IOCL will increase diesel imports to 1.2 million tonnes in the financial year to March 2009 from 670,000 tonnes last year, Serangulam V Narasimhan, director (finance), IOCL, told reporters in New Delhi today.
The refiner has imported 200,000 tonnes of the fuel so far this year, Narasimhan said. The company does not plan to import diesel in the next two to three months as demand usually lows during the monsoon, he said.
Demand for diesel is growing at the rate of around 25 per cent, while the Indian refiners have capacities to meet the growth in demand up to 15 per cent. The higher demand and production capacity constraints necessitate increased imports.
Reliance exports almost all of the 11 million tonnes of diesel it produces from its refinery after it was given the status of an export-oriented unit early last year.
“At the worst of times, the diesel demand growth has been 8-10 per cent,” said IOCL Chairman and Managing Director Sarthak Behuria. He added that demand for the fuel increases as it is used to generate electricity from generator sets during power failures.
He added that the demand growth has been high in states like Karnataka, where the power crisis has been severe.
Oil marketing companies sell diesel to industrial users as well as retail consumers at the same subsidised prices. “This has created the jump in demand,” Behuria said.
Diesel is the largest-selling fuel in the country. The country consumed 47.64 million tonnes of the fuel in 2007-08. Consumption is expected to be higher by around 20 per cent this year.
Wednesday, July 30, 2008
ICICI Bank
ICICI Bank: Hard times
Mumbai July 29, 2008,
A slower loan growth could hurt profits.
One reason why ICICI Bank has seen a 6 per cent fall in its net profit for the June 2008 quarter is that its total income has barely budged. The interest earned from loans—the bank’s core business—is up just 5.6 per cent and it is the 37 per cent rise in income from fees that has pulled up the topline. Treasury losses of close to Rs 600 crore too have hurt profits.
If the fall in the bottomline isn’t sharper, it is because the bank has managed to keep costs in check. Thanks to a higher share of cheaper current and savings accounts (CASA), which went up by about 500 basis points, it has paid less to borrow .That’s why the net interest margin (nim) has risen by 45 basis points y-o-y to 2.4 per cent and stayed flat sequentially. Besides, expenses on direct marketing have been slashed.
The loan book has grown by just 13 per cent for the stand-alone entity while for the consolidated entity, it was up 20 per cent. The management says it will scale back retail loan targets to 5-10 per cent this year though the corporate book could grow by about 25 per cent.
Given that fee incomes will not be as easy to come by — especially in the derivatives segments, the bank could grow at a slower pace this year. Margins may remain stable with the bank able to access more low cost deposits from an expanding branch network.
The real problem area, however, is the rising quantum of non-performing loans (npls). Net npls are up at Rs 1,300 crore compared with Rs 1,100 crore in the March 2008 quarter: loan defaults could increase in a weakening economic environment.
The ICICI Bank stock came off by close to 10 per cent on Friday to close at Rs 656.85. At this price, the stock trades at about 1.1 times estimated FY09 book value and is not expensive. However, the worst may not be over given that the environment remains challenging.
Mumbai July 29, 2008,
A slower loan growth could hurt profits.
One reason why ICICI Bank has seen a 6 per cent fall in its net profit for the June 2008 quarter is that its total income has barely budged. The interest earned from loans—the bank’s core business—is up just 5.6 per cent and it is the 37 per cent rise in income from fees that has pulled up the topline. Treasury losses of close to Rs 600 crore too have hurt profits.
If the fall in the bottomline isn’t sharper, it is because the bank has managed to keep costs in check. Thanks to a higher share of cheaper current and savings accounts (CASA), which went up by about 500 basis points, it has paid less to borrow .That’s why the net interest margin (nim) has risen by 45 basis points y-o-y to 2.4 per cent and stayed flat sequentially. Besides, expenses on direct marketing have been slashed.
The loan book has grown by just 13 per cent for the stand-alone entity while for the consolidated entity, it was up 20 per cent. The management says it will scale back retail loan targets to 5-10 per cent this year though the corporate book could grow by about 25 per cent.
Given that fee incomes will not be as easy to come by — especially in the derivatives segments, the bank could grow at a slower pace this year. Margins may remain stable with the bank able to access more low cost deposits from an expanding branch network.
The real problem area, however, is the rising quantum of non-performing loans (npls). Net npls are up at Rs 1,300 crore compared with Rs 1,100 crore in the March 2008 quarter: loan defaults could increase in a weakening economic environment.
The ICICI Bank stock came off by close to 10 per cent on Friday to close at Rs 656.85. At this price, the stock trades at about 1.1 times estimated FY09 book value and is not expensive. However, the worst may not be over given that the environment remains challenging.
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