Oil & gas stocks buzz in trade; OMCs rally on HSBC upgrade; upstream companies gain too

Oil & Gas stocks: OMCs, after the recent stupendous rally, have been winners of both bearish and bullish calls. In the recent round of brokerage calls, HSBC has turned bullish on OMCs. It has given a 'buy' rating to all the OMC companies, including BPCL, HPCL, and IOC.
 
The brokerage maintains that while these stocks have seen a re-rating, there is further room. The foreign brokerage expects a range-bound oil price in the near term, which will support profitability. Further, the medium-term outlook also remains positive due to refinery upgradation, noted the brokerage.
 
HSBC also said that it has revised valuation multiples to reflect reduced government intervention.
 

 
In separate news, the centre today raised the windfall tax on petroleum crude to Rs 4,600 per metric tonne from Rs 3,300 with effect from March 1, according to a government order released on Thursday.
 
The government also cut the windfall tax on diesel to zero from 1.50 per litre, effective March 1, the order showed. The tax on petrol and aviation turbine fuel will continue to be nil.
 
The government imposed a windfall tax on crude oil producers in July 2022 and extended the levy on exports of gasoline, diesel, and aviation fuel as private refiners wanted to sell fuel overseas to gain from robust refining margins instead of selling locally. The government revises the tax fortnightly.
 
Nonetheless, despite the move, oil refiners in trade today gained as much as 6 per cent, with Oil India trending with the most gains, followed by ONGC.