OMCs score record highs on lower crude prices; Indian Oil, HPCL hit 52-week high, BPCL among top Nifty 50 gainers
Shares of Indian oil marketing companies (OMCs) are on an uptrend and scored record-high levels on Thursday, December 28. As noted in the last few sessions over the declining prices of international crude oil as investors expect limited effects of supply cuts announced by the Organistation of Petroleum Exporting Countries and its allies (OPEC+).
Shares of Indian Oil Corporation (IOC) were locked at over 5 per cent upper circuit to hit its fresh 52-week high of ₹133.95 apiece on the BSE. Similarly, shares of Hindustan Petroleum Corporation Limited (HPCL) surged significantly and were locked at 10 per cent upper circuit to hit a 52-week high mark of ₹425.45 apiece on the BSE. HPCL emerged as one of the top gainers on BSE today.
Also, shares of Bharat Petroleum Corporation Limited (BPCL) rose 3.26 per cent to hit an intra day high of ₹470.85 apiece on the NSE. BPCL emerged as one of the top gainers on the Nifty 50 earlier today.
Domestic brokerage firm JM Financials said in its latest report that OMCs’ gross auto-fuel marketing margin has jumped to ₹7.9 per litre compared to the historical margin of ₹3.5 per litre and gross auto-fuel integrated margin has risen to ₹16.8 per litre compared to the historical margin of ₹11.3 per litre.
The brokerage had also highlighted that OMCs in India will find support with international crude oil prices sustaining below the $80 per barrel mark in the near-term. Upstream oil explorers including Oil India and Oil and Natural Gas Corporation (ONGC) will be the key beneficiaries of low crude oil prices.
‘’Optimism on OMCs will be contingent on crude sustaining below ~$80/bbl with OMCs’ FY24 P/B valuations (at ~0.9x for HPCL/IOCL and 1.1x for BPCL) being only 10 per cent discount to historical average after recent rally,” said JM Financials.
OMC stocks today
On Thursday, shares of IOC opened at ₹127.25 and gained 5.26 per cent to hit a 52-week high mark of ₹133.95 against a previous close of ₹126.70 apiece on the BSE. Shares settled 5.21 per cent higher at ₹133.30 apiece on the BSE. The OMC commands a market capitalization of ₹174,485.67 crore.
HPCL shares opened at ₹386.45 and surged 10.09 per cent to hit its fresh 52-week high mark of ₹425.45 against a previous close of ₹381.80 apiece on the BSE. Shares finally settled 9.43 per cent higher at ₹417.80 apiece on the BSE.
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Published: 28 Dec 2023, 05:19 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.