JM Financial favors Oil India, ONGC over OMCs on oil outlook
In short
JM Financial said it prefers Oil India and ONGC over IOC, BPCL and HPCL. It expects Brent to stay around $80 a barrel over the next 12 months, and sees Oil India growing earnings 15% to 20% a year over three to five years.
This matters because it points investors toward upstream oil stocks and away from fuel retailers. The report does not explain the full reason for the cautious view on OMCs.
What the reporting says
JM Financial said Oil India and ONGC are preferable to IOC, BPCL and HPCL, according to the publisher summary. The note said Brent is expected to stay supported around $80 per barrel over 12 months and that Oil India could deliver 15% to 20% EPS compounding over three to five years. The immediate implication is a supportive view on upstream oil producers, while the basis for caution on OMCs was not detailed.
Why it matters
JM Financial’s reported view favors upstream producers such as Oil India and ONGC over oil marketing companies including IOC, BPCL and HPCL. The note expects Brent to remain supported near $80 per barrel over 12 months and says Oil India could compound EPS by 15% to 20% over three to five years. The reporting does not give a full explanation for the OMC caution.