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ONGC, Oil India rise despite weakness in broader market; domestic gas price hiked by 62%

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Shares of Oil and Natural Gas Corporation and Oil India opened higher on Friday after the government raised the price of domestically produced gas by 62 percent to $2.90 per million British thermal units. Oil India shares even hit their 52-week high at Rs 267.70 while ONGC's stock was 0.41 percent away from its 52-week high of Rs 148.7.

ONGC, Oil India rise despite weakness in broader market; domestic gas price hiked by 62%
Shares of Oil and Natural Gas Corporation (ONGC) and Oil India opened higher on Friday after the government raised the price of domestically produced gas by 62 percent to $2.90 per million British thermal units.
Reacting to the development shares of ONGC and Oil India gained despite the weakness in the overall market.
Oil India shares even hit their 52-week high at Rs 267.70 while ONGC's stock was 0.41 percent away from its 52-week high of Rs 148.7.
The new price will take effect from today. The hike follows the firming up of gas prices on global benchmarks that dictate domestic rates.
The 62 percent hike in domestic natural gas price was largely along expected lines, Macquarie said, while Nomura believes the development is negative for users like GAIL India but positive for upstream companies like Oil and Natural Gas Corporation and Oil India.
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According to Edelweiss, an upward revision in domestic gas price is a positive for ONGC as a hike of $1 per mmbtu will boost the profit before tax by 14.50 percent on an annualised basis.
Whereas, for Oil India, there will be an increase in domestic gas realisation so Sharekhan expects it to increase to $3.8 per mmbtu, which is currently at around $2.5 per mmbtu.
At 9:26 am, shares of ONGC were trading 1.4 percent higher at Rs 146.45 and those of Oil India gained 2.1 percent at Rs 265.40. Year-To-Date, these stocks have surged 59 percent and 149 percent respectively.
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