ET Intelligence Group: Stocks of state-owned oil marketing companies (OMCs) including IOCL, BPCL and HPCLNSE -1.35 % increased by 4-7% on Monday following the resumption of dynamic pricing for retail fuels after a gap of nearly three months. Among them, Bharat Petroleum Corp (BPCL) stands to gain more given its superior operating performance and the ongoing divestment process.
The fuel marketing segment constitutes nearly 50-60% of the total operating profits of the state-owned OMCs. Every 50 paise change in the marketing margins may impact their annual projected earnings by 11-21%. The continuity of dynamic fuel prices means OMCs may be able to maintain marketing margins, thereby offering much-needed revenue visibility. Earlier, OMCs had stopped the practice of changing fuel prices daily due to rising fluctuations in the international crude oil prices.
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