OIL Prices De-regulated - Will OMC's benefit?
Govt of India de-regulated OIL prices last week.
This week we got a statement that OMC's (Oil Marketing companies) are free to market the prices of petrol.
The Govt would only intervene if the prices are way too high.
huh?
Well if we say we weren't expecting that statement, we are fooling ourselves.
No Govt would want to sell petrol @ 100 Rs/litre etc.
They know it would be detrimental.
Prices of everything around us would shoot up.
Do you think then it is the right time to buy OMC's like HPCL/BPCL/MRPL/IOC?
The answer is part yes and part no.
In the short term, these OMC's will see lesser subsidy rates and obviously their profit will shoot up.
Some of them, IOC/MRPL etc are already close to expansion and hence more volume implies more sales will help them.
In the long run, obviously the govt will keep a close watch on the prices on which these OMC's will sell.
What does this imply?
In my understanding, the profits will grow. Hopefully the dividends too.
Most of the folks do not take into consideration the real estate value of these OMCs. These are huge valuation.
I am going to bet on IOC. It has the highest volume as well as more expansion plans.
I would also bet on MRPL but there is a background thought process whether it would be ever merged with ONGC and in what ratio.
That thought makes me a bit skeptical.
However, the flavor of the current scenario is OMC's like HPCL/BPCL/IOC/MRPL.
Lets hope everyone makes money while there is time to make some.
List by profits
http://www.moneycontrol.com/stocks/marketinfo/netprofit.php?optex=BSE&indcode=Refineries&opttopic=netprofit
List by sales
http://www.moneycontrol.com/stocks/marketinfo/netsales.php?optex=BSE&indcode=Refineries&opttopic=netsales
Govt of India de-regulated OIL prices last week.
This week we got a statement that OMC's (Oil Marketing companies) are free to market the prices of petrol.
The Govt would only intervene if the prices are way too high.
huh?
Well if we say we weren't expecting that statement, we are fooling ourselves.
No Govt would want to sell petrol @ 100 Rs/litre etc.
They know it would be detrimental.
Prices of everything around us would shoot up.
Do you think then it is the right time to buy OMC's like HPCL/BPCL/MRPL/IOC?
The answer is part yes and part no.
In the short term, these OMC's will see lesser subsidy rates and obviously their profit will shoot up.
Some of them, IOC/MRPL etc are already close to expansion and hence more volume implies more sales will help them.
In the long run, obviously the govt will keep a close watch on the prices on which these OMC's will sell.
What does this imply?
In my understanding, the profits will grow. Hopefully the dividends too.
Most of the folks do not take into consideration the real estate value of these OMCs. These are huge valuation.
I am going to bet on IOC. It has the highest volume as well as more expansion plans.
I would also bet on MRPL but there is a background thought process whether it would be ever merged with ONGC and in what ratio.
That thought makes me a bit skeptical.
However, the flavor of the current scenario is OMC's like HPCL/BPCL/IOC/MRPL.
Lets hope everyone makes money while there is time to make some.
List by profits
http://www.moneycontrol.com/stocks/marketinfo/netprofit.php?optex=BSE&indcode=Refineries&opttopic=netprofit
List by sales
http://www.moneycontrol.com/stocks/marketinfo/netsales.php?optex=BSE&indcode=Refineries&opttopic=netsales
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