Oil marketing companies BPCL, HCPL, Indian Oil gained on
Monday after oil prices are also under pressure amid the Greece crisis.
US benchmark West Texas Intermediate for delivery in August plummeted
$1.88 to $55.05 a barrel and Brent crude tumbled 50 cents to $59.82 in
late-morning Asian trade.
Oil prices fell after Greek voters overwhelmingly rejected the bailout terms demanded by international creditors, with official figures from Sunday's referendum showing 61.31 percent voting "No" and 38.69 percent voting "Yes".
"The result of the Greek referendum has thrust the world into uncharted territory," Singapore's DBS Bank said in a market commentary.
Lower crude oil prices could help reduce the under-recoveries of Indian oil marketing companies on sale of LPG and kerosene at controlled prices. However, a fall in the rupee could reduce the benefit from lower crude prices.
Oil marketing company BPCL and HPCL shares have witnessed a stellar run in past one year. BPCL has surged 51 per cent in one year while HPCL shares have jumped over 87 per cent in last one year. In comparison, Nifty rose 10 per cent during the period.
The deregulation of diesel prices in October 2014 lifted the sentiment of these oil marketing companies, which used to bear a huge subsidy burden for selling the fuel below market prices. Edelweiss Financial Services has a positive outlook on these oil marketing companies.
Prior to diesel deregulation, gross marketing margins of IOC, BPCL and HPCL were capped at Rs 0.71 paise/litre. However, post deregulation of diesel the margin since April 2015 till date has been Rs 1.2/litre, which is 70 per cent higher than the previous margin and will flow through their earnings, said Jal Irani, oil and gas analyst at Edelweiss Financial Services.
Mr Irani expects these margins to improve further to around Rs 1.60 per liter, which is going to drive profits. "Over a 3-year period we are looking at earnings doubling for BPCL and HPCL," said Mr Irani.
At 11:30 a.m., BPCL was up over 3 per cent to be the biggest Nifty gainer while HPCL gained 2 per cent and Indian Oil 1.5 per cent. In comparison, the Nifty was down nearly 0.90 per cent.
Oil prices fell after Greek voters overwhelmingly rejected the bailout terms demanded by international creditors, with official figures from Sunday's referendum showing 61.31 percent voting "No" and 38.69 percent voting "Yes".
"The result of the Greek referendum has thrust the world into uncharted territory," Singapore's DBS Bank said in a market commentary.
Lower crude oil prices could help reduce the under-recoveries of Indian oil marketing companies on sale of LPG and kerosene at controlled prices. However, a fall in the rupee could reduce the benefit from lower crude prices.
Oil marketing company BPCL and HPCL shares have witnessed a stellar run in past one year. BPCL has surged 51 per cent in one year while HPCL shares have jumped over 87 per cent in last one year. In comparison, Nifty rose 10 per cent during the period.
The deregulation of diesel prices in October 2014 lifted the sentiment of these oil marketing companies, which used to bear a huge subsidy burden for selling the fuel below market prices. Edelweiss Financial Services has a positive outlook on these oil marketing companies.
Prior to diesel deregulation, gross marketing margins of IOC, BPCL and HPCL were capped at Rs 0.71 paise/litre. However, post deregulation of diesel the margin since April 2015 till date has been Rs 1.2/litre, which is 70 per cent higher than the previous margin and will flow through their earnings, said Jal Irani, oil and gas analyst at Edelweiss Financial Services.
Mr Irani expects these margins to improve further to around Rs 1.60 per liter, which is going to drive profits. "Over a 3-year period we are looking at earnings doubling for BPCL and HPCL," said Mr Irani.
At 11:30 a.m., BPCL was up over 3 per cent to be the biggest Nifty gainer while HPCL gained 2 per cent and Indian Oil 1.5 per cent. In comparison, the Nifty was down nearly 0.90 per cent.
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