Oil prices have rallied more than 26 percent to 13-month highs in both Brent and WTI since the start of the year. In our special segment, ‘Hunt For Value’, we take a look at how Q4FY21 is looking like and how are valuations shaping up for the oil and gas space.

Share Market Live

NSE

Dayanand Mittal, Oil & Gas, Telecom Research Analyst, JM Financial Institutional Securities helped analyse the situation.

“Last one year rally on Bharat Petroleum Corporation Ltd (BPCL) has been on the back of this disinvestment newsflow and with the government focusing to close this deal in the first half of next year, there is more optimism around it,” he said.

“BPCL could be a big beneficiary assuming things go well,” he added.

“For GAIL, the biggest concern has been the weak crude prices because that has headwinds for both – gas trading business and weak crude price usually means weak petchem and liquefied petroleum gas (LPG) margins. So with crude price recovery the concerns on the gas trading business goes off. That has been a key concern for most of the investors. Petchem and LPG margins are also recovering. There is still scope for some upside even from current levels,” he added.

“In the oil and gas space, city gas distribution (CGD) companies are our preferred picks. It is a secular growth story. They also have very strong pricing power. Indraprastha Gas Ltd (IGL), Mahanagar Gas Ltd (MGL) and Gujarat Gas are in a sweet spot, we prefer IGL followed by Gujarat Gas,” he stated.

For more, watch the video

(Edited by : Abhishek Jha)