ONGC, Oil India, Reliance share price rise: Upsteam oil producers to benefit most from windfall tax being scrapped | Stock Market News
Source: Live Mint
Stock Market Today: Oil and Natural Gas Corporation , Oil India , Reliance Industries saw thair share price rise up to 3% in the intaday trades on Tuesday. The removal of Windfall tax by the government is likely to remove a major overhang over the stocks
The ONGC share price that opened at ₹260.65, slightly higher than the prvious close of ₹257.60. ONGC Share price nevertheless gained further more to ₹264.55 marking gains of up to 3%. Oil india share price to gained more than 1% and so did Selan Exploration Technology Ltd, Hindustan Oil Exploration Co Ltd, Reliance Industries Ltd among others.
Windfal Tax removal
The removal of notifications on Windfal tax on crude oil production, and on diesel/ATF/gasoline exports, finally being withdrawn remain positive for the Oil & Gas producers mainly ONGC and Oil India though benefits may accrue to others too, said analysts.
The exporters of Diesel and other petroleum products Relaince Industries also may benefit however Upstream oil and Gas producers will benefit more said anslysts as a key overhang is removed
With no windfall tax on diesel, Aviation Turbine Fuel, gasoline for over a year, this decision is a mere formality, said analysts.
ONGC, Oil India key beneficiaries as per analysts
For crude oil, while current windfall tax is nil due to lower prices, the risk of taxes returning was there if oil prices were to rise again, said Kotak Institutional Equities who added that it is more positive for upstream companies . Kotak has raised the fair vaue for Oil India to Rs360 from Rs345 earlier. For Oil and Natural Gas Corporation or ONGC stock, Kotak has raised its ratings to Add from reduce with Fair values at ₹Rs285 also being raised from Rs270 earlier.
For ONGC and OIl India analysts had generally maintained positive outlook , lookig at risng Oil and Gas production and rising gas prices.
For ONGC, Elara Securties expects ramp-up in KG-98/2 production, which will lead to 6% net profit CAGR (compound annual growh ) during FY24-27 despite weak crude oil price of around $ 75 a barrel. Elara has reiterate Buy given 2-3% oil & gas production CAGR in FY24-27 and higher natural gas realization from new wells/fields (~40% premium to existing APM production).
For Oil India, Antique Stock Broking had said that production growth remains strong and with IGGL’s progress nearing completion, Oil India is nearing a stage where growth will not be restricted dur to any production bottlenechs said Antique which had positive ratings for the stock
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