· Mar’23 volumetric offtake clocked in at 1.1mn tons, falling by 9%/39% on a MoM/YoY basis, with HSD and FO leading the decline (down 43%/70%YoY).

· The said fall (35 month low) is majorly attributable to demand destruction, as POL sales volumes are correlated with an overall economic slowdown

· Overall, we expect increased HSD offtakes in the upcoming Kharif sowing season (April-June), although, with fuel prices on the rise, it is expected to be an expensive affair for farmers

· Company wise, major players in the sector, PSO/APL/SHEL/ GOPL, delivered throughput levels of 535k/113k/89k/58k tons, taking total market share to stand at 48.4%/10.2%/8.2%/5.3% for Mar’23, respectively.

· On a forward looking basis, rampant inflationary pressures in the coming quarters alongside a depressed GDP outlook during the year period compels us to assume negative volumetric growth for the industry, by approximately 20-21% for FY23 (previous 15%).

· Overall, APL (TP: PkR360/sh) remains our top pick from the sector, with the company being a perfect mix of capital upside and dividend yield.

Courtesy – AKD Research