The Government hopes to mobilise about ₹45,000 crore by selling its stake in three state-owned firms: ONGC, Coal India and NHPC.

Of the three, ONGC seems to be the favourite among analysts. According to Bloomberg, 38 of the 48 analysts covering the stock have put a buy rating on it. While eight analysts recommended that investors hold on to their ONGC shares, two have put out a sell recommendation.

An expected increase in production, benefits from the gas price hike and improved realisation due to a lower subsidy burden are possibly the reasons for their bullish stance on the oil exploration major’s stock.

In 2013-14, ONGC posted profit growth of 9 per cent and revenue growth of 7 per cent over the previous year.

NHPC not so hot Analysts have given a thumbs down to NHPC. Only nine out of 25 are positive about the company’s future prospects and have put a buy recommendation on the stock. An equal number has a hold rating, while seven have a sell rating.

Long delays in commissioning key projects such as the 2,000-MW Subansiri Lower Project in Assam and Arunachal Pradesh and the 800-MW Parbati-II project in Himachal Pradesh seem to be the larger concern.

The company’s net profit declined 53 per cent in 2013-14, despite a 16 per cent increase in revenue.

With Coal India, it was a mixed verdict. While 29 out of 45 analysts who cover the stock are positive about its future prospects, eight suggested investors sell the stock as they see it moving down. However, eight have a hold recommendation on the stock.

Despite flat revenue growth in 2013-14, Coal India’s net profit declined by almost 13 per cent. Falling revenue from e-auctions and stagnant coal output are expected to weigh on the company’s performance.

Related Topics
comment COMMENT NOW