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Informist, Friday, Aug 2, 2024

MUMBAI - Shares of upstream companies Oil & Natural Gas Corp and Oil India are likely to fall next week as these players are likely to report an on-year decline in their net profits for the June quarter, an analyst tracking oil companies said. ONGC will release its results on Monday and Oil India on Thursday.

While ONGC's production continues to decline, Oil India is on track to achieve significant volume growth, Prabhudas Lilladher said in its research report today. The broking firm retained its 'buy' rating for Oil India, while it downgraded ONGC to 'reduce' with a target price of 320 rupees. The latter closed 3.4% lower at 330.10 rupees on the National Stock Exchange. 

ONGC may report a 13.4% on-year decline in its net profit to 86.78 bln rupees for the June quarter, while revenue may rise 2.4% to 354.7 bln rupees, as per the average of estimates of nine broking firms. Subdued crude oil sales volume and a fall in natural gas volume are likely to have weighed on the upstream company's earnings for the quarter.

For Oil India, the company is expected to post a near-15% decline in net profit to 17.32 bln rupees from a year ago, while the revenue is seen rising near 5% to 57.93 bln rupees for Apr-Jun, as per the average of eight estimates. The company's crude oil sales volume is likely to grow to 860,000 tn, according to Kotak Securities and Motilal Oswal Financial Services. This is 15% higher compared with the year-ago quarter. 

Meanwhile, developments in the US and West Asia, along with the movement in crude oil prices, will also be closely monitored. The October Brent Crude futures contract traded on the Intercontinental Exchange rose 0.2% to $79.64 at 1656 IST. "NYMEX (The New York Mercantile Exchange), Brent and domestic crude oil futures recouped some losses this Friday afternoon trade after losing 2% in the previous session, as investors weighed supply risks from rising geopolitical tensions in the Middle East against global oil demand concerns," Reliance Securities said in a note. 

Today, global equity markets, including India, slipped into losses on worries about the possibility of a recession in the US. The fear took shape after US data showed a weak labour market and manufacturing activities. While the June quarter earnings are likely to lend cues, analysts said the current weakness may persist for a couple more days in the Indian market. 

TOP HEADLINES
* OPEC may pause phasing out of voluntary output cuts on mkt conditions
* IOC ups 19-kg commercial LPG cylinder price by 6.50 rupees in Delhi
* IOC ups ATF price by 1,827.34 rupees/kl to 97,975.72 rupees in Delhi
* Govt cuts windfall gains tax on domestic crude oil to 4,600 rupees/tn
* India Jul crude imports dn 1.6% YoY as refineries run maintenance ops
* Analysts grill HPCL management on EBITDA growth in Apr-Jun
* Earnings Review: Weak refining margin, high oil prices shrink IOC PAT
* IOC to construct greenfield terminal in Patna, to cost 17 bln rupees
* IOC Apr-Jun PAT falls nearly 81% YoY, sales fall 2.2%
* Earnings Review: HPCL Apr-Jun net profit sharply down on lower GRMs
* Earnings Outlook: Oil India volume seen weak, windfall tax up on qtr
* Earnings Outlook: Weak refining margins, high oil prices to hurt IOC
 

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Anjana Therese Antony
Edited by Deepshikha Bhardwaj

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