October 23, 2018 / 4:30 AM / 3 months ago

BUZZ-Nomura downgrades India's BPCL, IOC and HPCL to 'neutral' from 'buy'

** Nomura downgrades three Indian oil marketing companies (OMCs) — Bharat Petroleum Corp Ltd, Hindustan Petroleum Corp Ltd, and Indian Oil Corp — to ‘neutral’ from ‘buy’

** India govt’s decision to ask OMCs to absorb 1 rupee per litre on petrol/diesel is a big dent to the confidence on marketing reforms; with elections in 2019 and weak macros, investor confidence may not recover any time soon - Nomura

** Believe OMCs are making losses on petrol currently that will unlikely be made good, as officially the fuel prices remain deregulated, Nomura adds

** The Japanese brokerage cuts its earnings forecasts for FY19 by 11-18 pct, acknowledges “earnings cuts are sharp and confidence is lower”

** Nomura’s preferred picks in India’s oil & gas sector are GAIL India Ltd and Reliance Industries Ltd

** HPCL down 3.7 pct, BPCL down 3.2 pct and IOC falls 3 pct

** OMCs drag Nifty Energy index down as much as 1.7 pct

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