Oil & Gas shares have witnessed a steep decline on reports that the government would raise subsidy of upstream oil companies from 33% to 38.5%, which would affect the profitability of these companies.
Varatharajan Sivasankaran, VP-Research of Indiabulls Securities, in an interview with CNBC-TV18's Sonia Shenoy and Anuj Singhal, gave his perspective on the hurdles oil explorers may face in the wake of upstream subsidy burden. Below is the verbatim transcript of his interview. Also watch the accompanying video. Q: What would be the EPS impact on companies like ONGC, GAIL and Oil India, if the subsidy mechanism is changed from the current 33% to 38.5%?
A: The earnings per share (EPS) impact may range between 8% and 10% for ONGC as well as Oil India. However, it
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