· April’23 volumetric offtakes clocked in at 1.17mn tons, changing by +6%/-47% on a MoM/YoY basis, with HSD and FO leading the decline (down 50%/84%YoY).

· The ongoing season has seen demand being primarily fulfilled by the cheaper Iranian diesel (smuggled in through Dasht, Baluchistan), as the demand for HSD from official sources has declined significantly (down 47%YoY in April’23).

· Assuming similar trends in POL offtakes witnessed in 3QFY23 in the remaining two months, total PDL collections are expected to end the full year at ~PkR612bn, an estimated annual shortfall of PkR244bn

· Company wise, major players in the sector, PSO/APL/SHEL/ GOPL, delivered throughput levels of 576k/120k/88k/65k tons, taking total market share to stand at 49.2%/10.2%/7.5%/5.6% for April’23

· Overall, APL (TP: PkR375/sh) remains our top pick from the sector, with the company being a perfect mix of capital upside and dividend yield. History of high payouts (avg. DPR: 80%) leads to an expected DPS of PkR37.5/50/sh for FY23/24, respectively

Courtesy- AKD Research