OMCs are on Fire: How Long to Hold Them?

  • Stock Market Analysis

One space that’s making a killing for investors is the oil marketing companies. The lower oil prices have already resulted in a significant profit boost for these companies which is evident from the Q2 FY24 earnings report.

The three major oil marketers - HPCL, BPCL and IOC have all reported a profitable quarter compared to a loss-making one a year ago. As these stocks have already gained quite a lot of traction in the recent past, some of you might be wondering what is their remaining potential.

Here’s a fair estimate of how much potential these companies are probably left with on the basis of the average of their intrinsic values from diverse financial models.

Bharat Petroleum Corporation Limited

Image Source: InvestingPro+

Bharat Petroleum Corp. Ltd. (NS: BPCL ) has a market capitalization of INR 88,788 crore and trades at a TTM P/E ratio of 3.23. The stock has rallied over 21% in the last one month but still holds the potential to further rack up a gain of 27% to INR 536.4. Although the dividend yield has dropped to a mere 0.96%, the potential capital gain seems sufficient to negate this con.

Hindustan Petroleum Corporation Limited

Image Source: InvestingPro+

Hindustan Petroleum Corporation Ltd (NS: HPCL ) has a market capitalization of INR 45,421 crore and trades at a mouth-watering TTM P/E ratio of 2.73. Looking at the average of intrinsic values, the level of INR 370 leaves a little potential of 7.9%. However, if you look at the lowest intrinsic value among all 11 models, it is INR 330 which indicates a very low downside risk.

Indian Oil Corporation Limited

Image Source: InvestingPro+

Indian Oil Corporation Ltd (NS: IOC ) is the largest in the list, with a market capitalization of INR 1,46,084 crore and trades at a TTM P.E ratio of 3.78. Despite a run-up of over 27% this month so far, the stock is still capable of scaling to INR 148, depicting a further upside potential of 37%. It has a relatively better dividend yield of 2.83%

This fair value is a very realistic representation of what the stock is worth and hence gives a highly accurate guideline of where investors/traders can look to book profits.

-----------------------------------------------------------------

X (formerly, Twitter) - aayushxkhanna

CYBER MONDAY SALE: You can avail InvestingPro+ at a massive 55% discount and by using the coupon code PROC324 get an extra 10% discount over and above the ongoing promotional price for the Bi-yearly plan only. Click on the image below to access the link

Cyber Monday

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100
  • NIRAV JARIWALA @NIRAV JARIWALA
    bank nifty sell 46600 target 45700 06-12-2023 expiry
    Like 0
  • Kalid Mohideen @Kalid Mohideen
    Suprb
    Like 0
  • Jagdish Vala @Jagdish Vala
    which app shows this values
    Like 0
    • Aayush Khanna @Aayush Khanna
      InvestingPro+
      Like 0
    • Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

      Error: File type not supported

      Drop an image here or

      100
  • jagdish kumar pahuja @jagdish kumar pahuja
    Good study& analysis
    Like 1

Related Articles