The shares of Oil India and Oil & Natural Gas Corporation (ONGC) appreciated to the tune of 5.97% and 4.17% respectively on Thursday’s intraday trade after the government slashed the windfall profit tax on domestically produced crude oil.
The Centre levies windfall tax on the profits made by oil producers, on the price they get above $75 per barrel. The windfall tax on domestically produced crude oil was reduced from ₹ 5,050 per tonne to ₹ 4,350 per tonne. It slashed the additional excise duty on aviation turbine fuel (ATF) to ₹ 1.5 per litre from ₹ 6 per litre earlier. Cess has been reduced to $ 7.4/bbl from February 16.
Oil India
Prabhudas Lilladher has a buy rating on the shares of Oil India, with a target price of ₹ 305.00. This translates to an upside of 17.81% as compared to its share price of ₹ 258.9 apiece at 01:26 PM on Thursday.
“We believe OINL’s earnings will ride on new capacity addition across crude oil, natural gas and refinery. Maintain ‘BUY’ with TP of Rs305 (Rs300), based on 3.0x/EV/E FY24E,” the brokerage said.
Oil & Natural Gas Corporation (ONGC)
Motilal Oswal has a buy rating on the shares of ONGC with a target price of ₹ 198.00, which translates to an upside of 28.90% as compared to its share price of ₹ 153.60 apiece at 01:30 PM on Thursday.
“The year 2023 is likely to be a defining year for ONGC with two prominent triggers. These are: a) a rise in domestic oil & gas production, and b) possible floor on gas realization. Both are likely to play out in favor of the company, an outcome that makes us pitch ONGC as the top idea for 2023 in the sector,” the brokerage said.
Written by Simran Bafna
