9:16 am - Thursday June 13, 2024

Why ONGC, Oil India Are Likely to Come Under Pressure

780 Viewed Alka Anand Singh Comments Off on Why ONGC, Oil India Are Likely to Come Under Pressure

Shares of ONGC and Oil India are likely to come under pressure from October 1 as natural gas prices in India may fall below $4.2 per mmBtu (million British thermal unit) from $5.18 per mmBtu now according to reports.

As per the mechanism approved in October 2014, price of domestically produced natural gas is to be revised every six months using weighted average or rates prevalent in gas-surplus economies of US/Mexico, Canada and Russia to incentivise exploration in deep-sea.

The next gas price revision will be on October 1, 2015.

“Preliminary calculations based on average price in the gas hubs stated in the formula indicate that the rate from October 1 is likely to be $4.16 or $4.17 per mmBtu on NCV (net calorific value) basis,” Press Trust of India said in a report quoting an Oil Ministry official.

On gross calorific value (GCV) basis, the rate will be about $3.8 per mmBtu as compared to $4.66 currently, the report added.

The gas price cut if happens will be negative for gas producers like ONGC and Oil India although it will be positive for fertiliser producers and Gail.

Analysts say gas price cut will be biggest negative for ONGC and Oil India as their profitability will be significantly impacted due to this. A $1/mmBtu price cut will lower the FY16 earnings per share (EPS) of ONGC by about 5.5 per cent, while Oil India’s EPS will be impacted by 3 per cent, analysts say.

However, a $1/mmBtu price cut will raise GAIL’s FY 16 EPS by 5 per cent and it would be able to report 10 per cent annual growth in EPS for FY16, analysts added.

As of 1.47 p.m., ONGC shares traded 0.33 per cent lower at Rs 238.40 and Oil India shares traded 0.44 per cent lower at Rs 436.85 apiece compared to 0.28 per cent fall in the broader Nifty.

Don't miss the stories followIndiaVision India News & Information and let's be smart!
0/5 - 0
You need login to vote.
Filed in
Washington - A new study has suggested that more mid-life job stress means more health problems during old age. The research from Finland found that both physical and mental job strain were linked to illness later in life, Fox News reported. Mental job strain is generally a result of tight deadlines, high demands and having little control over one’s work, while physical strain includes sweating, breathlessness and muscle strain. Lead researcher Mikaela von Bonsdorff explained that occasional feelings of job strain are not necessarily a bad thing, but persistent high job strain has been identified as a health hazard. The new findings come from a study of more than 5,000 middle-aged Finnish public sector employees who were initially surveyed about stress at work in 1981.The researchers combined that information with data from national hospital records spanning the next 28 years. It was found that with higher strain in midlife, days in the hospital for both men and women tended to increase, especially for physical strain, but for mental strain, the link was only clear among men.

Hiring activity up 13% in August, says Naukri survey

L&T Finance Holdings to get Rs 708 cr from Bain Capital

Related posts