HPCL, BPCL, IOC slip up to 4% after CLSA recommends Sell; sees 37% decline

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

Shares of Oil Marketing Companies namely - Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) slid up to 4 per cent in intra-day deals on Thursday after CLSA recommended a 'SELL' on the sector.

Analysts at CLSA believe that OMCs are pricing-in much higher than historical marketing margins, and a notable premium to the global peer average EV (earnings value)/Ebitda multiple.

A lack of retail fuel price changes in the last two years has clearly exposed the vulnerability of profits for the OMCs. While, expectations of a cut in petrol, diesel prices ahead of elections