Downstream oil cos in 'bright spot' in energy: Goldman

Downstream oil companies, especially state-owned oil marketing companies, remain the ‘bright spot’ in Indian oils coverage, said Goldman Sachs in a research report.

On the other hand, performance of upstream companies may be impacted by uncertainty of reforms for PSU companies, unappealing outlook on crude oil prices and sluggish offtake of long-term LNG in India due to availability of cheaper spot LNG and fuel oil.

"With diesel/ gasoline prices now adjusting to international levels every fortnight and direct transfer of subsidy to LPG consumers kicking in, we continue to see better cash flows and returns among OMCs," the report adds.

Goldman Sach believes the core valuations of OMCs are still inexpensive despite movement in OMC stocks over the last year.