
HSBC has reiterated its buy call on oil marketing companies (OMCs), including BPCL, HPCL, and IOC, citing several factors influencing the sector. The brokerage firm believes that recent stock corrections make these OMC stocks more attractive for investors.
Key highlights from HSBC’s analysis include:
- Oil price volatility: The fluctuation in global oil prices is expected to reduce the risk of auto fuel pump price reductions, which HSBC identifies as the biggest risk to OMC profitability.
- Demand for auto fuels: The recovery in demand for auto fuels, particularly in non-controlled product categories, is anticipated to offset the weakness observed in marketing margins.
HSBC’s positive stance on OMCs underscores its confidence in their ability to navigate market challenges and benefit from favorable macroeconomic trends.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.