Oil India share jumps 5% as Saudi Arabia hikes crude prices

Oil India shares jumped 5% to Rs 261.45 on the BSE in intraday trade on Monday as Brent crude prices surged after Saudi Arabia raised rates for its crude shipments in July. 

Also Read| Sensex falls over 200 points while Nifty around 16,500 in early trade

The company’s shares were trading around its 52-week high of Rs 267.70, set on October 1, 2021. It has outpaced the market in the last week, rising 17% versus a 0.61% fall in the S&P BSE Sensex.

Also Read| Week ahead: RBI policy, global indications to weigh on Sensex, Nifty

According to Reuters, oil prices surged more than $2 in opening trade on Monday as Saudi Arabia hiked pricing dramatically for its crude sales in July, indicating how tight supply remains despite OPEC+’s agreement to accelerate output increases over the following two months.

Also Read| Week in review: Sensex, Nifty rise as investors weigh economic data

The company recorded robust profitability in the March 2022 quarter (Q4FY22), with turnover and profit after tax (PAT) rising by 74% and 92%, respectively. In Q4FY22, the company announced its record high quarterly net profit of Rs 1,630 crore, as it got over $100 per barrel for oil produced and sold. The net profit nearly doubled during the quarter, compared to Rs 847.56 crore profit in the same time the previous year.

Also Read| Stocks that should be on your watchlist on Monday, June 6, 2022

After a rise in crude price and an improvement in domestic gas pricing, analysts at HDFC Securities believe that Oil India is a worthy ‘buy.’

Also Read| Trending Stocks: Minda, Adani Transmission, V-Guard and others in news today

“A target price of Rs 300 is premised on an increase in crude price realisation and improvement in domestic gas price realisation. Oil price realisation for FY22 improved to $76.7/bbl, vs $43/bbl in FY21, given the expected global economic rebound, post Covid-19,” the brokerage firm had said in a Q4FY22 result update report.

Also Read| US Stock Market: DJIA, S&P500, Nasdaq and Russell ended in red on Friday

Likewise, ONGC shares rose 2% to Rs 154.30 on the BSE.  HDFC Securities has a ‘buy’ rating on ONGC with a target price of Rs 220.