News flow related to the Bharat Petroleum Corp. Ltd (BPCL) divestment has kept oil marketing company (OMC) stocks in the spotlight. The key concern of OMC investors, however, has been on weak demand since the coronavirus outbreak, leading to stock prices remaining subdued. This is getting addressed now with the positive news flow on vaccines.
OMCs such as Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Ltd (HPCL) have gained 30-41% from their September-October lows. BPCL shares, on the other hand, are taking cues from progress in the divestment process.
Among the three, IOCL derives a significant portion of earnings from the refining business and petrochemicals too, in addition to fuel marketing. Comparatively, HPCL has a higher proportion of retail fuel sales in its portfolio. With better prospects for the marketing segment, HPCL shares have seen a sharper rebound.
