Bullish signal on daily chart
In July/August 2018, the Government had increased the axle load limit for all trucks. This move helped increase the freight capacity of the entire population of trucks in India by 20-25%, equivalent to three years of incremental freight demand, thus negatively impacting HSD demand.
Oil production matrix
Domestic crude oil production during 2019-20 was lower by 5.9% at 32.2 MMT, as the diminishing phase of many fields continued. Crude oil and condensate production by public sector entities decreased by 2.5% while production by private sector entities decreased by 14.5% in 2019-20 as compared to the previous year. However, improvement in production levels is expected in the near future with the Government’s thrust on ramping up domestic production through investment-friendly policies.
Volatility in crude oil price - challenges of cash management
The heightened volatility in crude oil prices in the recent times has also come as a major challenge for the Company. Oil price volatility, exchange rate fluctuation along with lower demand, made cash management challenging, affected the working capital cycles, and led to short-term debt build-up.