Moneycontrol Bureau
Nomura says he expects further upside in oil marketing companies (OMCs) - HPCL, IOC and BPCL - despite rising 17-35 percent in last two months as it still thinks valuations are undemanding and scope remains for further re-rating.
The brokerage house has maintained buy rating on them with revised target price at Rs 1,635 per share (from Rs 1,250 earlier) on Hindustan Petroleum Corporation, Rs 700 (from Rs 540) on Indian Oil Corporation and Rs 740 (from Rs 640) on Bharat Petroleum Corporation.
It feels OMCs will continue to outshine the broader market, saying there will be further earnings upgrades.
"We continue to highlight that the steep FY16 growth has set the earnings base higher for OMCs, and earnings are likely to get stronger," the brokerage house says.
Adjusted for inventory losses, FY16 earnings were 29-62 percent higher, with the sharpest upside for IOC. In recent months, the pace of street earnings upgrades has hastened.
At 13:13 hours IST, the scrip of Hindustan Petroleum Corporation was quoting at Rs 1,242.65, up 3.07 percent while Bharat Petroleum Corporation was at Rs 577.75, up 1.35 percent and Indian Oil Corporation at Rs 562, up 3.08 percent on the BSE.Posted by Sunil Shankar Matkar
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