3 Oil & Gas Stocks Can Rally 66%: Prabhudas Assigns Buy After Sharp Correction In Crude Prices

Prabhudas Lilladher has upgraded 3 stocks to buy from Oil & Gas sector. These stocks are Bharat Petroleum Corporation, Hindustan Petroleum Corporation, and Indian Oil Corporation.

According to the analyst, "We are upgrading all three Oil marketing companies (OMCs) to 'BUY' due to sharp correction in crude oil prices and turnaround in diesel marketing profitability." If you buy these stocks now, you can get maximum 66% return. Check key takeaways below:

1. Buy IOCL

The last trading price of Indian Oil Corporation Ltd is Rs 78 apiece with an intraday gain of 2%. The company has a market capitalisation of Rs 1,11,345.96 crore. The stock has given 8% return in last 3-months, 13% in last 1-month, and 2% in last 1-week.

Prabhudas has recommended investors to buy Indian Oil Corporation with a target price of Rs 130 apiece. If you buy IOCL now, you can get 66% Return soon.

IOCL ratings upgrade to BUY: We upgrade IOCL to 'BUY' from REDUCE earlier as we increase our earnings to factor in 1) higher marketing margins and 2) lower operating expense. We value IOCL at 7x EV/E FY24E and arrive at PT of Rs130 (Rs50 earlier). At our PT, the stock will trade at 1.2x P/BV FY24E.

 

 

2. Buy HPCL

The last trading price of the stock is Rs 252 apiece with an intraday gain of 5%. The company has a market capitalisation of Rs 35,761 crore. The stock has jumped 21% in last 1-month only and 9% in last 1-week.

The large cap company operates in Gas & Petroleum sector. The stock's 52-week high is Rs 332 apiece and 52-week low is 200 apiece, respectively.

Prabhudas Lilladher has assigned a target price of Rs 350. If you buy Hindustan Petroleum Corporation (HPCL) now, you can get 39% potential return.

According to Prabhudas, "We upgrade HPCL to 'BUY' from HOLD earlier as we increase our earnings to factor in 1) higher marketing margins and 2) lower operating expense. We value the stock at 7x EV/E FY24E and at PT of Rs350 (Rs195 earlier) it will trade at 1.2x P/BV FY24E. HPCL is most leveraged to recover in marketing margins, as marketing volumes are 2x refining capacity. HPCL is our preferred pick among OMCs."

3. Buy BPCL

The last trading price of Bharat Petroleum Corporation Ltd is Rs 349 apiece with an intraday gain of 3%. The company has a market capitalisation of Rs 75,706 crore.

The stock has jumped 13% in last 1-month and 3% in last 1-week. Prabhudas Lilladher has given buy rating to the stock with a target price of Rs 420 apiece. If you buy Bharat Petroleum Corporation now, you can get potential 20% return.

According to the analyst, "We upgrade BPCL to 'BUY' from REDUCE earlier as we increase our earnings to factor in 1) higher marketing margins and 2) lower operating expense. We value BPCL at 7x EV/E FY24E and arrive at PT of Rs420 (Rs260 earlier). At our PT, the stock will trade at 1.5x P/BV FY24E."

Disclaimer

The stocks have been picked from the brokerage report of Prabhudas Lilladher. 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 check with certified experts before taking any investment decision.