Citi believes the Indian oil and gas sector will be closely watched due to multiple event-driven catalysts in the coming months. These include:
- GST inclusion for gas during the GST Council meeting on Dec 21 or a potential excise duty cut on CNG in the Union Budget (Feb 1).
- Sharp earnings recovery for oil marketing companies (OMCs), driven by sustained marketing margins or LPG compensation announcements.
- Progress on GAIL’s tariff hike proposal.
- Commissioning of Reliance’s solar module facility.
Citi highlights city gas distributors (CGDs) such as IGL and MGL as attractive, offering a compelling risk/reward ratio from a 6–12 month perspective, though immediate upside may depend on government actions.
OMCs like HPCL, GAIL, and now IOCL have been placed on Positive Catalyst Watch due to expected near-term triggers. The brokerage anticipates a substantial recovery in sectoral fundamentals, supported by government incentives.
