2 Oil & Gas Sector Midcap Stocks To Buy For Good Returns, Showing Upside Potential: Sharekhan

Sharekhan in its recent report on equity has maintained its positive outlook on Hindustan Petroleum Corporation Ltd. (HPCL) and Gujarat Gas Ltd. (GGAS), two midcap Oil & Gas sector stocks. The brokerage suggests "Buy" the stocks with an attractive valuation for decent returns. It sees a positive upside in the share prices of the stocks, giving you a decent return over the investments. Check below to know more:

Hindustan Petroleum Corporation Ltd. (HPCL)

HPCL Stock Performance, 52 Week Low/High, Market Cap, Potential Returns

Sharekhan maintains "Buy" on the HPCL stock with a revised price target of Rs 265 apiece. The stock can fetch a decent 16% return if purchased at the current market price (CMP). It is Maharatna PSU stock having a market capitalisation of Rs 32,449.29 crore.

The stock's CMP is Rs 229.40 apiece, trading 0.13% down. Its 52 week low is Rs 200.05 apiece and 52 week high is Rs 306.70 apiece, respectively. The stock gained 3.83% in the past week and declined 1.02% in 1 month. It has fallen 22.24% in 1 year and 40.24% in 5 years, respectively. However, it gained 15.81% in 3 years.

Sharekhan Maintain Buy on HPCL with a revised PT of Rs. 265

Sharekhan said, "We believe that earnings downgrade cycle is largely over for OMCs and continued strength in GRM (supported by high middle distillate cracks) with likely normalisation of auto fuel marketing margins would stabilise earnings over FY24-25. Moreover, HPCL's valuation of 3.4x its FY2024E EPS and 0.8x its FY2024E P/BV is attractive and FY24E DPS implies a 10% dividend yield. Hence, we maintain a Buy on HPCL with a revised PT of Rs. 265."

Gujarat Gas Ltd. (GGAS)

GGAS Stock Performance, 52 Week Low/High, Market Cap, Potential Returns

Sharekhan maintains "Buy" on the stock of GGAS with an unchanged price target of Rs 560 apiece. According to the assigned target price, the stock can give a decent return of up to 11% if purchased today at the CMP. It is a Gas Distribution stock having a market capitalisation of Rs 34,973.66 crore.

The CMP of the stock is Rs 510.40 apiece, trading 0.04% up. Its 52 week low is Rs 403.55 apiece and 52 week high is Rs 583.75 apiece, respectively. The stock has fallen 0.56% in the past week and gained 5.19% in 1 month. It has fallen 0.18% in 1 year. However, it gained 97.37% in 3 years and 199.99% in 5 years, respectively.

Sharekhan Maintain Buy on GGAS with an unchanged of Rs. 560

Sharekhan said, "We believe that GGAS's valuation of 21x/16x FY24E/FY25E EPS partly factors in concern on earnings due to volume volatility and recent sharp decline in spot LNG price along with ramp-up of new GAs would drive strong double-digit volume growth over FY24E-25E. We expect a strong 18% PAT CAGR over FY22-25E and a superior RoE/RoCE of 24%/28% in FY25E. Hence, we maintain a Buy rating on GGAS but with an unchanged PT of Rs. 560."

Disclaimer

The stocks have been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.