Motilal Oswal - MOSL: Morning India (20/September/17)-1. Oil Gas (OMCs finally on the yellow brick road)-2. Telecom-3. Utilities-4. Healthcare

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Motilal Oswal

Team Research

MOSL: Morning India (20/September/17)-1. Oil & Gas (OMCs finally on the yellow brick road)-2. Telecom-3. Utilities-4. Healthcare

â€‹MOrning India (20/September/17): 1. Oil & Gas (OMCs finally on the yellow brick road); 2. Telecom; 3. Utilities; 4. Healthcare

Todayâ€™s top research theme

Oil & Gas: OMCs finally on the yellow brick road

With a clear indication from the ministry to not meddle in the pricing of auto fuels, the stage appears set for an increase in marketing margins, albeit small and gradual.

We also take a deep look at the more pressing issue recently for the three oil marketing companies (IOCL, BPCL and HPCL): high refining margins, which seem to have baffled quite a few. Our analysis suggests that with deregulation, the companies could focus more on their core performance, resulting in improved refining margins. Additionally, the threat of market share loss has not been significant, although it is an issue in the longer term.

We roll over partially to FY20 for arriving at September 2018 targets. We reiterate Buy on IOCL and HPCL, with targets of INR558 and INR583, respectively. We upgrade BPCL to Buy from Neutral, with a target of INR640.

20/09/2017 22 EN

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MOSL: Morning India (20/September/17)-1. Oil & Gas (OMCs finally on the yellow brick road)-2. Telecom-3. Utilities-4. Healthcare

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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