Party in oil & gas stocks may be over for time being: Kotak

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Moneycontrol Bureau

Once shunned public sector energy stocks hogged the limelight post elections in May on expectations of significant policy reforms by BJP-led coalition government. Despite  optimism that government's policy push will continue, Kotak Institutional Equities sees limited upside for key PSU oil and gas stocks from hereon.

"We do not see meaningful scope for earnings upgrades unless the government allows higher net realization for the upstream companies for incentivizing indigenous production and enhancing India’s energy security," it says in a report.

Also Read: India's power sector to see light at the end of tunnel soon

The research firm believes that earnings boost from reforms related to fuel pricing and subsidy-sharing mechanism is already in the price and has revised EPS estimates for these stocks. This revision aims to factor-in weaker rupee and modestly lower domestic gas prices at USD 6-7/mn BTU versus its earlier assumptions of USD7-8/mn BTU, it says.

Here are revised EPS estimates for FY2015-17E

 While Kotak has retained its ratings on the stocks, it has trimmed target prices for most stocks to factor reduction in earnings estimates. 

Top Picks

GAIL, OIL and RIL are its best bets from the sector and Kotak expects GAIL and RIL to deliver strong earnings growth in the medium-term. The brokerage has raised earnings estimates and price targets for both GAIL and RIL.

Disclaimer: moneycontrol.com is part of Network18 Media and Investments, which is owned by the Reliance Group

(Posted by Harsha Jethmalani)