ONGC, RIL: Shares of oil-to-telecoms giant Reliance Industries (RIL) surged more than 4 percent on stock exchanges in early morning trades Wednesday after The government lowered the unexpected tax On the prices of gasoline, diesel, aviation fuel (ATF) and crude oil after the drop in global prices.
Besides RIL, shares of other major oil refiners Oil and Natural Gas Company (ONGC) and Chennai Petroleum Company also rose by about 7 percent and 11 percent, respectively.
RIL shares rose 4.33 per cent to Rs 2542.50 per share on the National Stock Exchange (NSE) while on the Bahrain Stock Exchange it rose 4.25 per cent to Rs 2545.05.
Along the same lines, ONGC rose 7.02 per cent to Rs 136.40 per share on the Bahrain Stock Exchange and 6.80 per cent to Rs 136.60 per share on the New York Stock Exchange.
Chennai Petro shares also rose by 11.50 per cent to Rs 296.65 on the NSE and by 11.39 per cent to Rs 296.40 on the Bahrain Stock Exchange.
Earlier in the day, the center lowered the windfall profit tax on main fuels. It eliminated the Rs 6 per liter tax on petrol export and reduced the same value on ATF to Rs 4 per liter from 6. The tax on diesel was also reduced to Rs 11 from Rs 13 per liter. In addition, an additional tax of Rs 23,250 per ton on domestically produced crude oil has been reduced to Rs 17,000 per ton.
Explaining the impact on oil stocks, Swastika Investmart’s equity research analyst Puneet Patni said that earlier this month, the government imposed an unexpected tax on oil producers and refiners that it earned due to higher overseas refining spreads and global crude oil prices. Normal. However, due to the recent drop in global oil prices, the center decided to reverse the above decision and this was a positive move for companies such as RIL, ONGC and Chennai Petro.
Speaking about the impact on RIL shares, Ravi Singh, Vice President and Head of Research at Share India Securities, told Indianexpress.com, “RIL shares rose after the government cut the windfall profit tax due to lower international prices. The stock shows strength in a technical setup that is well supported by volumes. Strong trading. Chart patterns point to an immediate target at Rs 2,600 levels in the near term.”
Manoj Dalmia, founder and director of Profect Equities, said the move by the government would be a huge boost to these companies as they can face profit upgrades and better profit margins can be reported in the coming quarters.