Investor sentiment towards state-owned oil marketing companies (OMCs) such as Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL) and Indian Oil (IOC) has improved sharply with crude oil prices falling to 18 year low. Shares of the OMCs, after hitting 52-week lows recently, rebounded by up to 15 per cent on Tuesday. And, they could see further gains.
The soft crude oil prices bode well for these companies, which may see a rise in their marketing margins, decline in working capital requirements and zero risks of subsidy burden. Even the government will get an opportunity to roll out more reforms on kerosene and cooking gas pricing, which will be positive for the OMCs.
