More Stories

Informist, Friday, Aug. 29, 2025

NEW DELHI – Near-term prospects of oil and gas shares, especially those that are part of Nifty Oil and Gas, currently look extremely weak, according to analysts. Having lost over 3% already this week, the sectoral index is expected to trade even lower going forward, a Mumbai-based technical analyst said.

Nifty Oil & Gas closed 1% lower Friday at 10789.75 points. "The index is going to trade between 10368-10282 (in the near-term). If it breaks this level, it can go to 9500," said Anshul Jain, a technical analyst at Lakshmishree Investment & Securities Ltd. The sectoral index sharply underperformed the benchmark Nifty 50, which closed only 1.8% lower this week.

Mahanagar Gas Ltd. and Gujarat State Petronet Ltd. were the worst performers on the index this week, having lost over 5%. No company that is part of the index managed to close in the green for the week. Shares of Indian Oil Corp. Ltd., Hindustan Petroleum Ltd., Bharat Petroleum Ltd., GAIL (India) Ltd., and Reliance Industries Ltd. can be bought on dips as the index falls, Jain said.

EARNINGS IMPACT

Earlier this week, CareEdge Ratings said that the oil marketing companies' under-recoveries from liquefied petroleum gas fell 35% on a sequential basis during the June quarter. "This reduction in under-recovery is essentially attributed to the price hike undertaken in April 2025 by Rs 50 (INR 50) per 14.2 kg cylinder, alongside some moderation in LPG sourcing cost," the firm said in a note. As such, these companies' under-recoveries for the quarter stood at INR 79.40 billion.

Oil marketing companies' earnings for the June quarter missed analysts' expectations, due to higher-than-estimated inventory losses. This was because they preferred to carry more inventory amid geopolitical tensions, HSBC Global Research said in a note. Lower crude oil prices, which are supportive of strong auto fuel marketing margins for oil companies, augur well for their earnings in the ongoing financial year, they said.

While oil companies' gross refining margins are currently lower than their long-term averages, their product cracks are healthy and higher than in the previous fiscal. "This indicates refining profitability could be better than last year if Russian crude mix does not alter too much," HSBC said. 

The firm has increased marketing margin estimates for oil marketing companies on the back of lower crude oil prices. "We believe that OMCs now have a large margin of safety owing to low oil price and a large capex plan which gives us confidence that a normative level of earnings (assumed) will still be maintained," they said.

India's crude oil basket was at around $69 per barrel earlier Friday, slightly higher than Thursday. Traders are assessing the escalating geopolitical tensions, as Washington upped the pressure on New Delhi to curb oil purchases from Russia even as Moscow pounded Kyiv late Thursday. According to Kotak Securities, oil prices are being pressured by concerns over a supply glut amid the nearing end of the summer driving season in the US and the Organization of the Petroleum Exporting Countries and allies unwinding output cuts. The firm expects the downturn in oil prices to be limited as traders await India's response to the US tariffs and for potential economic sanctions against Russia by the Trump administration. 

TOP HEADLINES
* Moody's affirms ONGC 'Baa3' local, foreign currency issuer ratings
* Oil India, BPCL ink pact for gas distribution network in Arunachal Pradesh
* ONGC sets up internal group to mull trading unit for crude, refined fuels
* Coal India trade unions to seek at least INR 110,000/worker as FY26 bonus
* Premier Energies shifting focus from US to India mkt on policy uncertainty
* US Customs details draft of 50% tariff on India, effective Wed
* ONGC commences natural gas sales from Chinnewala Tibba block in Rajasthan
* RIL's Nauyaan Tradings acquires balance 6.1% stake in arm from Welspun Corp
* ONGC Green planning INR 60-bln capex in FY26, says CEO Mazumder

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

US$1 = INR 88.20

Reported by Anand JC

Edited by Tanima Banerjee

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.