Bulletin Updates

ONGC Petro additions Ltd: On an even keel, finally – 1 Sep 2021

Sep 01, 2021

The capacity utilisation of the company had improved to ~90% on an average during FY2021 (86% during FY2020), despite lower utilisation of ~62% in Q1 FY2021 due to the closure of the plant owning to the Covid-19 led lockdown. The improvement in the utilisation levels is driven by increased feedstock availability with commencement of the Hazira Dahej pipeline in December 2019.

Going forward, capacity utilisation is expected to remain healthy given the stabilisation of operations and healthy demand. Further, tolling margins have improved in FY2021, mainly because of moderation in feedstock cost (mainly naphtha) resulting in improvement in high-density polyethylene-naphtha (HDPE-naphtha) spreads.

Going forward, the tolling margins are expected to moderate, due to the increasing feedstock (naphtha) prices, even as output prices remain stable with re-opening of petrochemical plants globally. Moreover, the expected savings through exit of OPaL from the special economic zone (SEZ) in the near term is expected to improve its operating performance.

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