Morgan Staley believes that India's gas stocks offer some of the best growth opportunities as the country's gas pipeline network has doubled, which will help gas producers and city gas players in volume growth. Expecting healthy growth, the brokerage has raised the target price on ONGC, GAIL, and Oil India and picked GAIL, OIL, and ONGC along with Gujarat Gas as top choices.

Stocks

Rating

New Target

Old Target

OverweightIndore Investment

Rs 254

Rs 216

Overweight

Rs 195

Rs 151

Petronet LNG

Equalweight

Rs 219

Rs 235

Oil India

Overweight

Rs 487New Delhi Investment

Rs 329

Underweight

Rs 262

Rs 265

Gujarat Gas

Overweight

Rs 579

Rs 505

Indraprastha Gas

EqualweightAgra Investment

Rs 413Lucknow Wealth Management

Rs 432

Meanwhile, Jefferies sees a range-bound profitability for the oil-to-chemicals (O2C) segment of Reliance Industries (RIL) in FY25 and forecasts 13 per cent consolidated growth in earnings before tax, interest, depreciation, and amortisation (EBITDA), driven by a hike in Jio tariff. The brokerage has downgraded GAIL due to its rich valuation and instead prefers MGL.

The brokerage has raised its targets on Gujarat Gas, Petronet LNG, Indraprastha Gas, Mahanagar Gas, HPCL, IOCL, and BPCL

Stocks

Rating

New Target

Old Target

Petronet LNG

Underperform

Rs 195

Rs 180

Gujarat Gas

Underperform

Rs 385

Rs 370

Indraprastha Gas

Rs 430

Rs 420

Mahanagar Gas

Rs 1,450

Rs 1,350

Underperform

Rs 330

Rs 225Kanpur Investment

Underperform

Rs 405

Rs 300

Rs 130

Citi has also increased its target price on Gujarat Gas, Indraprastha Gas, and Mahanagar Gas.

Stocks

New Rating

New Target

Old Target

Gujarat Gas

Rs 425

Rs 390

Indraprastha Gas

Rs 510

Rs 470

Mahanagar Gas

Rs 1,390

Rs 1,250

According to domestic brokerage Anand Rathi, after a record H1FY24, third quarter trends suggest another relatively convincing performance by oil marketing companies (OMCs), despite being hit by inventory losses and lower gross refining margins (GRMs).

Further, strong non-OPEC supply of 1.6 million b/d for CY24 is likely to be ahead of demand of 0.9 million, thereby keeping oil prices subdued and supporting strong performances by OMCs.

The brokerage has raised its FY25 and FY26 estimates on the back of geopolitical tension, and the subsequent ban on European Union (EU) imports of Russian crude has led to supplies being diverted to China and India.

"We expect the continued availability of discounted Russian crude to support GRMs and increase our FY25e/FY26e refining assumptions by $1.3-2.7/bbl and earnings by 6-145 per cent," the report read.

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