Oil & gas stocks rally on multiple triggers; ONGC among top Nifty gainers
Of 15 stocks in Nifty Oil & Gas, 13 rallied and two (Gujarat Gas and Indraprastha Gas) were flat with negative bias in the early morning session today. Oil and Natural Gas Corporation shares were among the top Nifty50 gainers today, up more than 2.5 per cent on the NSE.
Energy stocks are in demand as the Nifty Oil & Gas index jumped as high as 1 per cent, contributing most to the overall market, during Tuesday’s session. The surge in the sector can be attributed to multiple triggers including windfall tax cut, LPG price revision, and new gas policy among others.
Of 15 stocks in Nifty Oil & Gas, 13 rallied and two (Gujarat Gas and Indraprastha Gas) were flat with negative bias in the early morning session today. Oil and Natural Gas Corporation shares were among the top Nifty50 gainers today, up more than 2.5 per cent on the NSE.
While stocks such as HPCL, Adani Total Gas, Castrol India, IOCL, BPCL, Oil India were up between 1-2 per cent, followed by Gail India, Reliance Industries, and Petronet LNG were up in the range of 0.3-1 per cent today on the NSE.
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Earlier on Monday, the government in a notification announced to cut the windfall tax on petroleum crude to Rs 4,100 per tonne from Rs 6,400 per tonne, effective from Tuesday. The government left the windfall tax on petrol, diesel, and aviation turbine fuel at zero.
According to HDFC Securities, Oil and Gas firms are expected to show good growth in Q4 with respect to profit before tax, owing to an improvement in profitability from the downstream segment due to higher demand for petroleum products, higher refining throughput, and gross refinery margins.
While upstream segment earnings are likely to be impacted amid a decline in crude oil prices and lower production, despite an on-year increase in domestic APM gas realisations, the brokerage said.
The analysts at HDFC Securities expect lower gas volumes for city gas distribution (CGD) companies, owing to high retail CNG prices and spot LNG prices and also estimate gas volumes for transmission companies and Petronet LNG (PLNG) to improve with spot LNG prices moderating sequentially.
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