Global brokerage house Morgan Stanley has recommended Hong Kong-based Hengan International, U.S. listed Indian firm MakeMyTrip Inc and India’s largest oil marketing company Indian Oil Corporation Ltd. as part of its "Three in Three" ideas for the week.
The report published by Morgan Stanley’s Asia research team, including Japan, every Monday aims to provide high-conviction calls and create opportunities for investors.
Why IOC Has Made It To The List
Being a downstream company, IOC will benefit from lower crude prices, overall cost reduction and growing diesel demand will aid its bottomline, said Morgan Stanley.
Asian refining stocks have outperformed their U.S. counterparts by 18 percent year-to-date. Morgan Stanley expects U.S. and Asia’s refining margins to remain divergent till 2018.
IOC’s improving product mix and counter-cyclical investment’s in refining capacity will aid the company, according to the brokerage house. It also believes IOC’s earnings to be better than its Indian peers.
Target price of Rs 533 implies an upside of 39 percent to Friday’s closing price.