The Hindu Business Line : Oil stocks gain on FIs' interest

AFTER remaining lacklustre for sometime, shares of petroleum products, especially refinery companies, were in the limelight today due to active buying by institutional investors on the back of good performance in their third quarter.

Brokers and analysts said after the results announced in January most of the stocks were hammered down in line with the overall market.

But now value investors were realising that at current prices most of the stocks look cheap compared with companies in other sectors.

Mr Arun Kejriwal of KRIS Research said, "There was buying interest in refinery shares as any subsidy issue relates only to marketing companies and GAIL and ONGC."

As per the new Government norms, subsidy on petroleum products has to be shared between oil marketing companies such as HPCL, BPCL and IOC. In addition, subsidy is also shared by GAIL and ONGC.

In today's trading, the major gainers include Chennai Petroleum, Kochi Refinery, Mangalore Refinery, Bongaigaon Refinery. There was buying in integrated oil companies (marketing and refinery) such as BPCL, HPCL and IOC, but the rise in their stock price was not as high.

Chennai Petroleum shares closed at Rs 92.90 (up 7.46 per cent); Kochi Refinery closed at Rs 182 (up 10.40 per cent); MRPL at Rs 58.55 (up 2.63 per cent); Bongaigaon Refinery stock closed at Rs 76.70 (up 1.72 per cent). In comparison, integrated oil companies such as BPCL stock price closed at Rs 493.85 (up 1.82 per cent); HPCL at Rs 477.60 (up 2.72 per cent) and IOC at Rs 489.20 (up 0.54 per cent).

"Improved profit margins show that refinery business is still looking good," said an analyst with a foreign broking firm.

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