BYCO’s REEMERGENCE - Inside Financial Markets


Furnace Oil Demand hit refineries are making best of their efforts to carve out an ordained negative trajectory, yet the most formidable and most exquisite strategy appears to have been adopted by BYCO, while Pakistan Refinery being a government goose is also struggling a lot.

BYCO, ATRL, NRL & PRL constituted a working group and negotiated with Government of Pakistan, and seemingly embarked upon their own plan so as to avert a looming existential crisis.

BYCO was the first to address the challenge of excess FO stock by way of exporting and Pakistan Refinery was second to place an upgrade of their plant on the cards. A cent-per-cent increase in earning of BYCO for first half for FY-20 is a tiny blinking light that investor look at as risk-averse to remorse the downslide of CY-19, which set the stage for sending refineries into stone stages.

BYCO’s recent decision to merge its Petroleum and Oil Terminal Division with a view the straighten the supply-chain-curve can potentially be meant to change the growth curve as well.

Trading trend & capital gain in the stock suggests that Investors, might actually be buying the story or strategy i.e. in execution by the managers and sponsors of the company   

The merger could enhance BYCO’s existing refining capacity by four times and with 254 retail outlets ang impending reforms in OMC sector, BYCO could actually pose a remorse to its competitors by securing a far superior position which other could not have perceived.

The strategy of the company to contain the operating cost and moving forward with a policy rate which is expected to remain well-below 8% for next two years, it would not be out of bloom to expect a far better and superior recovery in the days and months to come.

So far, the challenges faced by the Industry require a fierce and integrated wherein the players, regulator and concerned Ministry make a concerned effort and strategy, the practice of solo-fight by any player could actually make whole industry segment to suffer at large.

BYCO’s production based on RON 92 standard, installation of desulphurization, production of VLSFO and the announced merger, the Company could reemerge as an entity having exceedingly higher margins and growth potentials

Inside Financial Market

Syed Zaki Hussain

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