Oil Stocks Outlook for the week – 28.07.2014 to 01.08.2014
( www.rupeedesk.in )
( www.rupeedesk.in )
Stocks of state-owned oil marketing companies are seen
rangebound with a positive bias
in the coming sessions, as the outlook for the sector is
improving with stability in crude
oil prices and rupee-dollar movement. India's crude oil
basket continues to remain around
$105 a barrel while the Indian currency is around the
60-rupee-a-dollar mark. Despite all
the geo-political tension in Middle East and economic
slowdown crude remained under a
smaller range.
Meanwhile, the Indian government has stayed on course of
reforms with regards to diesel
prices and the Street is hopeful that the financial
situation of Indian Oil Corp, Bharat
Petroleum Corp, and Hindustan Petroleum Corp will only
improve going forward as
subsidies are eventually minimised. we expect the government
to announce full deregulation
of diesel as they did for petrol. This is a key positive for
entire sector primarily
for oil PSUs which has been suffering from higher subsidy
burden and higher debt
burden from past four years.
The biggest immediate beneficiary of the lower subsidy is
likely to be GAIL India, which
is unlikely to share the burden of subsidies any more. The
stock is seen positive in the
near term.
Among private sector companies, Cairn India is likely to come
under further pressure
because of the $1.25-bln loan extended by the company to its
parent Vedanta Resources
Plc.The stock was the biggest loser in the space this week.
It is likely to find some support around the 300-rupee level.
