Oil & gas stocks have risen significantly and have outperformed benchmarks in the past one year amid rising crude and elevated gas prices. All oil & gas indices have shown huge return in the past one year. In the past one year, as on April 6, S&P BSE oil & gas rose nearly 35%, S&P BSE Energy 36% and S&P BSE Power massive 77%.

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Brokerages are of the view that there is more upside left in these stocks as oil prices remain elevated and there has been an upward revision in domestic APM by 110% as well.  

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Given the trend in international gas prices (post unlocking of economies) and shortage of supply in Europe due to the Russia-Ukraine conflict, brokerage firm HDFC Securities expects the domestic APM gas price to further rise in H2FY23 by 45%.  

HDFC Securities sees an upside of nearly 60% in Oil India and Oil and Natural Gas Corporation (ONGC) from current levels.  

"ONGC and Oil India have outperformed the Sensex by 74/42% over the last 12 months, as Brent crude price increased by 68%. We expect the outperformance to continue," says the brokerage.  

The brokerage assigned a buy rating on Oil India with a target price of Rs380 per share, which translates into an upside of over 60% on closing price of the share (Rs 237.25) on April 6.  

Similarly, on Wednesday's closing price of Rs 172.75, the brokerage firm sees an upside of over 59% in ONGC. The target price for ONGC shares has been put out at Rs 275 in one year.  

"We expect ONGC’s and OIL’s oil and gas production to grow at CAGRs of 3/1% and 6/0.5% respectively and expect 9/78% CAGR improvement in oil and gas realisation, which should drive ONGC’s and OIL’s earnings by 14-18% CAGRs over FY22-24E," said HDFC Securities.