Due to many of requests from you all, I decided to do a little article.
Below is the inputs for last qtr
April 2022
Avg World Oil prices (WTI) - $105
LIOC selling prices
Petrol (92 Octane) – Rs. 338/-
Petrol (95 Octane) – Rs. 367/-
Auto Diesel – Rs. 289/-
Super Diesel – Rs. 327/-
May 2022
Avg World Oil prices (WTI) - $114
LIOC selling prices
Petrol (92 Octane) – Rs. 420/-
Petrol (95 Octane) – Rs. 450/-
Auto Diesel – Rs. 400/-
Super Diesel – Rs. 445/-
June 2022
Avg World Oil prices (WTI) - $123
LIOC selling prices
Petrol (92 Octane) – Rs. 470/-
Petrol (95 Octane) – Rs. 550/-
Auto Diesel – Rs. 460/-
Super Diesel – Rs. 520/-
April/June financial
Qtr Rev - 49.9 Bn
Qtr Cost of sale - 34.4 Bn
Qtr GP - 15.5 Bn
Other costs - 5.6 Bn
Profit - 9.9 Bn
EPS - 18.6
Now lets predict the next qtr
July 2022
Avg World Oil prices (WTI) - $91
Petrol (92 Octane) – Rs. 450/-
Petrol (95 Octane) – Rs. 540/-
Auto Diesel – Rs. 440/-
Super Diesel – Rs. 510/-
* Oil barrel drop is $32/barrel ($123-$91) (compared to June)
* Selling price drop is only Rs.10 & Rs.20
Result - Huge jump in gross profit value
August 2022
Avg World Oil prices (WTI) - $ 86 and falling
Petrol (92 Octane) – Rs. 450/- NO CHANGE
Petrol (95 Octane) – Rs. 540/- - NO CHANGE
Auto Diesel – Rs. 430/- ONLY Rs.10/- Decrease
Super Diesel – Rs. 510/- NO CHANGE
* Oil barrel drop is $5/barrel ($91-$86) (compared to July)
* Selling price drop is only Rs.10 (only diesel)
Result - Another huge jump in gross profit value
September 2022
Avg World Oil prices (WTI) - predict $70-$75
Assume they decrease Rs.20/- for all fuel types
Petrol (92 Octane) – Rs. 430/-
Petrol (95 Octane) – Rs. 520/- -
Auto Diesel – Rs. 410/-
Super Diesel – Rs. 480/-
*Oil barrel drop is $15/barrel (compared to Aug)
* Selling price drop is only Rs.20
Result - Still I expect increase gross profit value
Conclusion
Cost of sale is reduced from 43% by Sep 2022 compared to April 2022.
But Rev reduced only 8..5% max (assume 9%)
Result = 43%-9% =34% increase in GP
July-Sep Qtr GP - 15.5 Bn x 134% =20.8
Other costs - 5.6 Bn
Profit - 15.2 Bn
July-Sep EPS - Rs.28.5
Oct - Dec 2022 - 50 more sheds will come and Rev will again jump by 23.4%
50 new shed /213 existing sheds *100 = 23.4%
So lets assume 20% growth in EPS for Oct-Dec
Oct-Dec Qtr eps - Rs.28.5 x120% = Rs.34.2
Then Jan - Mar 2023 lets expect a EPS drop of 30% (worst case)
Jan-Mar 2023 Qtr EPS - Rs. 24.0
Lets add and calculate the Net earnings for the next financial year.
April - June 2022 - Rs.18.6
July - Sep 2022 - Rs.28.5
Oct - Dec 2022 - Rs.34.2
Jan - Mar 2023 - Rs.24
Total - Rs.105.3
Lets round off to Rs.100/- for easier understanding
At PE of 6 the share must trade at Rs.600/-
Maharaja