Shares of IOC, BPCL and HPCL gained between 1-2 percent in early trade Tuesday, after oil retailers raised diesel price for retail selling by 50 paise a litre (excluding value added tax). However, shares erased some early gains on profit booking.
Shares of Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) gained between 1-2 percent in early trade Tuesday, after oil retailers raised diesel price for retail selling by 50 paise a litre (excluding value added tax). However, shares erased some early gains on profit booking.
The hike in diesel price is attributed to sharp rupee depreciation. These companies also hiked petrol and jet fuel prices last week.
IOC, the country's largest company by sales, said the current revenue loss on diesel sales is more than Rs 8 per litre.
Last week, oil marketing companies hiked petrol price by Rs 1.82 per litre excluding VAT — a third successive hike in June.
Jet fuel (ATF) prices were increased last week by a steep 5.8 percent as rupee depreciation made imports costlier.
Aviation Turbine Fuel, or ATF, price at Delhi was hiked by Rs 3,617.84 per kilolitre (kl), or 5.8 percent, to Rs 66,034 per kl, according to Indian Oil Corporation.
At 9:56 hours IST, IOC gained 1.24 percent while HPCL and BPCL were up 0.4 percent each.
Bank of America Merrill Lynch has a buy rating on IOC with a target price of Rs 322.
"Our positive view on the stock is based on ongoing reforms to deregulate diesel, which would cut subsidy sharply and boost earnings and investor sentiment," the brokerage house report said.
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