India will have an incremental demand for oil and gas in the near future. The per capita consumption of the energy is going to increase in the country due to the rise in the emerging middle class. According to a latest report from Bloomberg, in the upcoming ten years, India is eyeing $300 billion in investments, in order to satisfy accelerating demand in the world’s fastest-growing oil market. India, China along with other Asian countries are projected to see a growth in worldwide demand for oil. As per experts, crude will remain stable if no geo-political tensions arise in 2018. A recent report from by BMI Research revealed that India’s annual fuel demand comprising diesel and gasoline, is projected to increase 7.5% in 2018.
Reliance Industries, Indian Oil Corp Ltd, Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd are some of the top refineries in India at present. Let’s take a look at their latest financial results and their performance in the stock market.
Reliance Industries Ltd.
The market capitalisation of Reliance Industries as on 20 June 2018 is a little over Rs.6,45,200 crore while the price of Reliance Industries stock is Rs.1016 on NSE and BSE. In 2017-18, Reliance Industries (RIL) completed 40 years of its IPO. In January 2018, the company’s share touched a 52-week high of Rs.974.5. It became the first Indian company to surpass the Rs.6 lakh crore mark in market capitalisation. For FY 18, revenues for the Oil and Gas segment of the company increased by 0.3% year-over-year to Rs.5,204 crore. Reliance and its partner announced plans to invest Rs.40,000 crore ($6 billion) to develop the already discovered deepwater gas fields in the KG-D6 Block. The company has invested $9.2 billion in shale gas business.
Indian Oil Corporation Ltd.
Indian Oil Corporation (IOC) became India’s most profitable state-owned company in FY 2017-18. The company recorded an increase of 12% in net profit to Rs.19,106.40 crore in the financial year ended March 31, 2017. The company’s Profit After Tax (PAT) increased by 40.3% year-over-year to Rs.5,218.1 crore compared to Rs.3,720.62 crore last year. Net profit of the company increased nearly 34% quarter-on-quarter to Rs.5,220 crore in the three months ended 31 March 2018. The Board recommended a final dividend of Rs.2 per share for the financial year 2017-18. IOC is said to be working on alternative strategies for crude oil purchases in order to offset potential cut in imports from Iran. The market capitalisation of IOC on 20 June 2018 is Rs.161,070 crore while the price of the stock is Rs.165 on NSE.
Hindustan Petroleum Corporation Ltd.
Hindustan Petroleum Corporation Ltd. (HPCL) reported highest ever net profit of Rs.6,357 crore on a turnover of Rs.2.43 lakh crore in FY 2017-18. The state-owned company’s gross sales during FY 2017-18 increased to Rs.2,43,227 crore as against Rs.2,13,489 crore during the previous financial year. In 2017, the company announced plans to invest Rs.61,000 crore over the next four years to expand and upgrade its existing refining capacity in order to meet higher quality fuel norms. The market capitalisation of HPCL as on 20 June 2018 is Rs.46,900 crore while the price of the stock is Rs.308 on NSE.
Bharat Petroleum Corporation Ltd.
(BPCL) nation’s second-largest fuel retailer, posted a net profit for the quarter ended March 2018 at Rs 2,674 crore, up 45%. The market capitalisation of BPCL as on 20 June 2018 is Rs.89,167 crore while the price of the stock is Rs.411. Last year, the company announced that will it will invest Rs.1.08 trillion over the next five years to expand operations across its businesses. The company recently received ‘maharatna’ status that will enable it to raise cheaper funds and make investments of up to Rs.5,000 crore in a single project going forward.
By 2030, India is looking forward to multiply its refining capacity by 77% to about 8.8 million barrels per day (bpd). This is expected to cost dozens of billions of dollars. World’s largest oil exporter, Saudi Aramco announced a $44-billion deal with three Indian firms – IOC, BPCL and HPCL. As per the deal, Aramco will build a refinery complex in India. In 2017, Dharmendra Pradhan, petroleum and natural gas minister stated that in the next 4-5 years, India’s production and oil exploration sector will see investments worth $40 billion.
Investing in these top refineries from a long-term perspective is a good investment opportunity. However, it is strongly advised to do thorough research while investing in stocks as they are volatile in nature. Click here websites like Bankbazaar.com that has several information about various kinds of stocks.