Financial Daily from THE HINDU group of publications
Thursday, Aug 28, 2003
Financial Daily from THE HINDU group of publications Thursday, Aug 28, 2003 |
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Markets
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Stock Markets Industry & Economy - Petroleum Oil stocks remain market pick Deeptha Rajkumar
OIL sector stocks, led by ONGC, Bongaigaon, HPCL and BPCL, remained market favourites amidst sustained investment based buying on the bourses on Wednesday. Brokers said with most of the oil companies looking at expansion and integration, the market is re-rating oil stocks. According to the market grapevine, FIIs and domestic funds have been mopping up shares at these counters, in particular ONGC. ``FIIs have taken a big call on Indian stocks. And whatever may be the sentiment, one can see sector switching but money stays invested in the market. And from an Asia point of view all these stocks are undervalued which is what is driving FII interest,'' a broker said. The stock of the oil and gas explorer, ONGC, hit a 52-week high at Rs 614.95 on BSE and Rs 670 on the NSE. It, however, ended the day at Rs 609.55 on BSE and Rs 610.25 on the NSE. The stock has appreciated by more than 34 per cent from its levels of Rs 454.60 on July 31. Attractive valuations, rising global crude oil prices have aided ONGC in its upside. However, according to Mr Arun Kejriwal, a market analyst, crude is not the only driver in this counter. "Worries about the company reporting a flat growth is a thing of the past. And given that the company has aggressive capex plans for the current fiscal, FIIs will definitely like to add it to their portfolio,'' he reasoned. ONGC accounts for 80 per cent of the natural gas and crude oil produced in the country. As regards Bongaigaon Refineries, market sources maintain that the stock is poised for a further upside. ``The stock is moving purely on fundamentals and there are several factors that place it on a strong footing. One, its 50 per cent excise duty benefit which protects its margins. Two, the additional capacity utilisation from the Ravva oil field, three its LPG plant leased out to IOC which is expected to put cash on books to the tune of Rs 30-40 crore. Lastly its proposal to lease out its PSF plant which would mean an additional Rs 90 crore odd on books. "All this puts the company's EPS at around Rs 24,'' Mr. Arun Kejriwal said. Bongaigaon Refineries ended the day at Rs 75.55 up 4.42 per cent with around 16.40 lakh shares traded on the BSE. On the NSE, the stock ended the day at Rs 75.50 up 4.79 per cent with around 42.51 lakh shares traded.
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