Oil, Gas Sector Check - Demand A Worry, But OMCs Poised For Another Leg Up: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Hindustan Petroleum Corporation Ltd. remains our preferred pick among the three oil marketing companies. We believe that a combination of stable crude oil prices and refining gross refining margins presents the potential for OMCs to achieve supernormal profits, which are not currently reflected in street estimates. We model a marketing margin of Rs 3.3/litre for both motor spirit and high speed diesel in FY25-26E, while current gross marketing margins are Rs 12.9/litre for MS and Rs 12.2/litre for HSD. We see the following as major catalysts for the stock:demerger and potential listing of the lubricant business, commissioning of its bottom upgrade unit in Oct-24 (leading to ~$2/bbl higher GRMs), andstart of its Rajasthan refinery in Q4 FY25-end. HPCL currently trades at 1.5 times FY26E P/B, which we believe offers a reasonable margin of safety as we estimate FY26E RoE of 18.3%. Our SoTP-based target price includes: The standalone refining and marketing business at 6.7 times FY26 enterprise/Ebitda; Rs 33/share as potential value unlocking from de-merger of the lubricant business; HMEL at eight times P/E based on its FY24 PAT (HPCL’s share), deriving a value of Rs 35/share; and Chhara Terminal at 1x P/B, and HPCL’s HRRL stake at 0.5 times of HPCL’s equity investment in the project to date. MRPL stake is valued at our target price. Accordingly, we arrive at our target price of Rs 460. Reiterate Buy..Click on the attachment to read the full report:.SBI Cards - Pain Nearing End But Not Over Yet: Motilal Oswal.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Oil, Gas Sector Check - Demand A Worry, But OMCs Poised For Another Leg Up: Motilal Oswal

The brokerage re-iterates Buy on ONGC and Oil India despite oil price-related risk.

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Oil, Gas Sector Check - Demand A Worry, But OMCs Poised For Another Leg Up: Motilal Oswal

The brokerage re-iterates Buy on ONGC and Oil India despite oil price-related risk.

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