Rising crude prices improving prospects for ONGC, OIL; sustenance holds key
Rising crude prices continue driving prospects for the upstream companies as ONGC and Oil India Ltd. Oil India, up about 44% on the bourses since its November lows, added about 4% to its gains on Tuesday. ONGC, the larger peer, too was up around 7% in today’s session, adding to more than 73% gains since the start of November.
The rising crude prices bode well for the realizations of these companies and hence improve earnings outlook. With Diesel and petrol prices getting market-linked, these companies have no major subsidy burden to be shared with oil marketing companies now. Hence these companies are a pure-play on the crude oil price say analysts.
The companies have witnessed regular improvement in quarterly performance too with rising realisations and normalised supplies post easing of lockdown.
