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:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Economic Pulse

REUTERS SHOWCASE

Political Pulse

Political Pulse

100 days of Modi: Good for business, not so good for marginalised groups.  Full Article 

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi  Full Article 

Best Economy

Best Economy

Swiss economy most competitive once again; EU, U.S., Japan improve.  Full Article 

Power Outage

Power Outage

Mumbai hit by power cuts  Full Article 

Commodities

Commodities

Gold imports, premiums to jump on festive demand - top refiner  Full Article 

Economic Worries

Economic Worries

Pakistan's promises to IMF in doubt as protests sap economy   Full Article 

Islamic Finance

Islamic Finance

Basel III deposit challenge looms over Islamic banks   Full Article 

Antitrust Probes

Antitrust Probes

U.S. business lobby says concerned China antitrust probes unfair.  Full Article 

Reuters India Mobile

Reuters India Mobile

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