Concerns On OMC Earnings May Be Short-Lived, Says Nirmal Bang
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Nirmal Bang Report
We remain positive on oil marketing companies. We see tactical upside in Bharat Petroleum Corporation Ltd. as the stake sale moves to the stage of financial bidding and eventual closure of the deal.
The sharp 6-7% sell-off on Monday is due to two potential worries -
1. the collapse in retail petrol and diesel margins as OMCs have not raised prices for more than two weeks despite the recent spurt in global fuel prices, which have also got an added tailwind from rising spreads and
2. the media news quoting unnamed government sources regarding stiff performance targets for public sector undertakings identified for stake sale to be laid down by ‘Department of Investment and Public Asset Management’ – the official group that oversees divestments.
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