OMCs trade weak in firm market; Indian Oil down 5% intra-day

BPCL and HPCL were down in the range of 1%-2% against 0.54% gain in Sensex.

Shares of state-owned oil marketing companies (OMCs) such as Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) have dipped by up to 5% on BSE in intra-day trade in otherwise firm market.

IOC has dipped 5% to Rs 416 after the company reported 85% year-on-year growth in its standalone net profit at Rs 3,721 crore in March quarter (Q4FY17), mainly on account of higher other income and tax reversals. The company had posted profit of Rs 2,006 crore in year ago quarter and Rs 3,995 crore in December quarter.

“Even as we believe that earnings have largely normalised for OMCs, IOCL could still surprise, driven by ramp-up in its Paradip refinery. IOCL has outperformed its peers over last one year (IOCL up 112% vs 57/82% for BPCL/HPCL), and we believe that this outperformance will continue,” analysts at Noumra said in a result update note.

Meanwhile, media report suggests that the government, which currently owns 57.3% stake, is planning to sell a 3% stake in IOCL via the offer for sale (OFS) route. CLICK HERE TO READ A RELATED REPORT

Among other individual, BPCL was trading 2.2% lower at Rs 710 and HPCL by 1.4% at Rs 502 on BSE. The S&P BSE Sensex hit a record high of 30,961 in intra-day trade, was up 0.54% at 30,919 at 11:52 am. Meanwhile, HPCL is scheduled to declare its Q4FY17 results today, while BPCL board will meet on Monday, May 29 to announce March quarter results.