IANS | 16 Mar, 2024
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.
