Edelweiss' report on Oil and Gas sectorFollowing lower-than-anticipated fuel price cuts today (diesel cut by INR0.5/litre and petrol by INR2.0/litre), implied marketing margins on diesel and petrol surged ~2x to INR1.5/litre and INR3.4/litre, respectively (diesel INR0.8/litre and petrol INR1.7/litre earlier). Average marketing margins on diesel have softened during FY16 to INR1.1/litre after an initial surge post deregulation. We believe marketing margins are poised to rise by as much as ~60% (INR1.8/litre) over 3 years based on our global case studies (refer our detailed report, “Double, but no quits!,” dated March 9, 2015). Following an excessive rally, risk-rewards are unfavourable for HPCL, pricing in earnings upside from deregulation. We have recently downgraded HPCL to ‘REDUCE’ and prefer BPCL and IOCL in the OMC space.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
Read More
