Rally in state-run oil firms overdone: Nomura

MUMBAI Fri Jan 18, 2013 2:21pm IST

A worker fills diesel in a taxi at a fuel station in Kolkata January 18, 2013. REUTERS/Rupak De Chowdhuri

A worker fills diesel in a taxi at a fuel station in Kolkata January 18, 2013.

Credit: Reuters/Rupak De Chowdhuri

Related Topics

Stocks

   

MUMBAI (Reuters) - Nomura said the rally in India's state-run oil companies on Friday, spurred by the government's announcement to allow higher diesel prices, was excessive and the action would not lead to any improvement in the bottom line of these companies.

"We reiterate that yesterday's actions are not a big reform, and there may not be much reduction in oil marketing companies' overall under-recoveries," Nomura wrote in a note on Friday.

"Also, even as under-recoveries reduce, these may not result in any improvements in the bottom line of companies, in our view," the analysts added.

Nomura maintained its 'reduce' rating on Oil and Natural Gas Corp (ONGC.NS) and Oil India Ltd (OILI.NS).

Shares of state-run companies surged for a second session on Friday after the government's diesel announcement.

(Reporting by Rafael Nam and Abhishek Vishnoi; Editing by Anand Basu)

FILED UNDER:

Politics of Religion

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Chinese Economy

Chinese Economy

China revises up size of 2013 economy, sees no effect on 2014 growth.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage