Reliance Industries, BPCL, Indian Oil hit 52-week highs

Reliance Industries (RIL), Bharat Petroleum Corporation (BPCL), Indian Oil Corporation (IOC) and Castrol India from the S&P BSE Oil & Gas index hitting their respective 52-week highs in intra-day trade on Monday.

At 03:07 PM, the S&P BSE Oil & Gas index was up 0.16%, as compared to 1.2% decline in S&P BSE Sensex. The index hit an intra-day high of 11,573, its highest level since September 10, 2014.

RIL was up 2.4% at Rs 1,129 in intra-day trade, its highest level since June 2014 on the BSE. Since September 2, the stock has outperformed the market by gaining 11.5% as compared to 0.38% fall in the benchmark index.

Karvy Stock Broking maintains ‘buy’ rating on the stock with target price of Rs 1,280.

“RIL is expected to maintain profitability in its core business with a capex that increases the operational efficiency and volumes across the refining & petrochemicals business, while new businesses like the Reliance Jio and retailing are likely to trigger the next level of growth and boost revenues,” said the brokerage firm in September research report.

BPCL (up 3% at Rs 620), IOC (up 2.5% at Rs 599) and Hindustan Petroleum Corporation (HPCL) were up between 2% and 3% the BSE.

According to Karvy Stock Broking, Government of India’s decision to provide a clear policy regarding product pricing, under-recovery sharing and freedom to implement the policy seamlessly had given the much needed oxygen for all PSU oil marketing companies after many years of struggle. Full deregulation of Diesel prices and implementation of the direct benefit transfer of LPG subsidy along with a clear subsidy sharing mechanism had led to a turnaround in the sector.

IOC being the largest player is the major beneficiary of the stable policy regime. The brokerage firm recommends a ‘buy’ rating on stock with target price of Rs 700.

Reliance Industries Limited (RIL)

Indian Oil Corporation

Bharat Petroleum