Oil & gas stocks index down 2 pc after petrol and diesel price cut
New Delhi, March 15 (IANS/WISHAVWARTA) The oil and gas stocks index witnessed major selling on Friday, and was down 2 per cent after the OMCs slashed petrol and diesel prices by Rs 2 per litre, said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services. Among the index constituents, HPCL was down 6 per cent, IOC was down 5 per cent, while the BPCL was down 3 per cent. The OMCs have finally announced price cuts in auto fuels (Rs 2/litre in retail price), following a series of cuts announced earlier by the CGD companies in CNG (Rs 2.5/kg) and government OMCs on LPG (Rs 100/cylinder), said Emkay Global Financial Services. There is no indication of any excise duty relief from the Central government yet, and it seems the price cut will be borne wholly by the OMCs, Motilal Oswal Financial Services said in a report. Blended gross marketing margin based on today’s prices was Rs 3.4 a litre which will now (post price cut) be slightly below Rs 2 a litre. On a quarter basis (4QFY24TD) though, the blended margin was Rs 5.4 a litre which will now decline to marginally below Rs 3.8 a litre. “Our earnings assumptions are based on the marketing margin of Rs 3.3/litre. As such, we maintain our earnings assumptions for now, despite the price cut. We expect a negative stock price reaction for the OMCs near term given the retail price cut and the recent elevated Brent crude price of $85/barrel,” Motilal Oswal Financial Services said.
