Oil Stocks Outlook for the week (06 - 10.08.2012)
Stocks of the three state-owned oil marketing
companies that are declaring their Apr-Jun earnings next week are likely to
take cues from the broader market, as well as crude oil prices and
rupee-dollar movement in the next five sessions. There are no major
triggers for the stocks of the three companies Indian Oil Corp Ltd, Bharat
Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd in the near term as a
hike in diesel price has almost been ruled out anytime soon. Quarterly
results of these companies did not reflect much on their performance and
mostly depend on the timing of compensation provided by the government for
revenue losses incurred on subsidised sale of fuels. All these companies
are expected to report heavy losses for Apr-Jun as the government is yet to
compensate them for the under-recoveries on retail sales of kerosene,
diesel and cooking gas.
In the quarter ended June, the three companies'
under-recoveries on these fuels are expected to be 478 bln rupees. Bharat
Petroleum will details its Apr-Jun numbers on Aug 10 and is expected to
report net loss of 38.90 bln rupees. Indian Oil and Hindustan Petroleum,
which will report their numbers on Thursday, are seen reporting Apr-Jun net
loss of 79.45 bln rupees and 38.60 bln rupees, respectively. Crude prices
have remained relatively stable at around $103 a barrel for the last few
days and rupee, too, has stabilised at around 55 for a dollar. If the rupee
strengthens it will benefit the three companies and stocks may react
positively. In case of crude oil, only a big movement is likely to affect
the stocks. Reliance Industries is likely to continue tracking the broad
market but bias remains negative next week, after the stock ended the
current week with gains. Unless the market rallies next week Reliance
Industries stocks may shed 10-20 rupees from current levels. If the broad
market weakens, the counter may decline further.
By RUPEE DESK [email protected]
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