Analysts believe that OMCs now have a large margin of safety owing to low oil price and a large capex plan which gives them confidence that a normative level of earnings will still be maintained.
Technical chart shows that this oil-related India-listed stock - OIL India - can potentially rally up to 27% from here on as Crude Oil soars on Israel-Iran war fears.
IDFC, Vedanta and oil marketing stocks among top dividend yield NSE 500 companies; Technical charts suggest up to 14% upside for these stocks; track these key levels.
Oil and marketing companies (OMCs) such as Indian Oil Corporation and Hindustan Petroleum Corporation Ltd (HPCL) slumped 4.1 per cent each at Rs 162.20 and Rs 457, respectively in intraday deals
In past three days, shares of OMCs have declined between 8 - 12 per cent on concerns that recent petrol and diesel price cut could hurt the companies' profit margins in the near-term.
Analysts at CLSA believe that HPCL, BPCL and IOC were pricing-in much higher than historical marketing margins, and a notable premium to the global peers
These stocks can gather steam provided crude prices soften and the government policies remain supportive. Here are the key levels one needs to monitor for these stocks.
BPCL, HPCL and IOC may rise up to 11 per cent in coming sessions, and if they manage to sustain their upward rally, medium-term bias may strongly shift in bull's favour.
After two tight quarters of profit-margin shrinkage due to global volatility, Indian OMCs are expected to see reduction in operational losses in the October-December quarter (Q3FY23).
Barring Indian Oil Corp, which gained over 4%, the other two oil marketing companies, BPCL and HPCL, trade with negative returns on YTD basis and have immensely underperformed benchmark indices
