Mr. Kirit Parikh ’s recommendations

Currently, I am positive on Oil and Gas sector. Keeping in mind the common man’ interest, we anticipate the partial implementation of Mr. Kirit Parikh ’s recommendations, which could lead to a re-rating of the entire sector. We expect a midway approach to these recommendations would improve the earnings visibility of OMCs and could lead the OMCs P/E to 17-19x from current 13.25x.

Considering the growing dependence on imports (80%) and a loss of Rs 180 crore per day on selling petrol, diesel, domestic LPG and kerosene below the imported cost by Indian Oil, BPCL and HPCL, this report supports market-determined pricing for petrol and diesel, Rs.100/cylinder hike in LPG and Rs. 6/liter hike in kerosene.