Geojit maintains buy call on BPCL, HPCL, IOC in long term

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Investment advisory firm, Geojit Financial Services has given a buy call on the three oil marketing companies, after the central government cut petrol and diesel price on Friday. Gaurang Shah, senior VP, Geojit Financial Services, said his brokering platform maintains buy call on OMC stocks amidst bloodbath in the D-Street on Friday March 15, 2024.

Shah said, “before general elections, the government might cut mobility fuel prices even more from here after Rs 2 per litre rate cut. Before election, OMC stocks have always come under pressure. But in very long term, we maintain buy call on all three OMCs — BPCL, HPCL and IOC. Apart from capital appreciation, these companies also provide luxury of high dividends as government owns highest stake in these stocks.”

All the three OMC stocks came under pressure after lot of brokerages raised question on margins after Government’s decision. BPCL fell four per cent to close at Rs 586 apiece on the BSE. HPCL and IOC fell six per cent and closed at Rs 468 and Rs 161 apiece, respectively.

Rally in PSU share has just begin: Shah

On concerns on rally in PSU stocks and resultant hike in valuations, Shah said PSU banks, shares of government companies in the defence, energy and oil exploration sectors will rally more once general elections get over. But he has advised investors to play on these sectors only with long term viewpoint.

On renewable energy stocks Shah said he likes Tata Power, NTPC, and Power Grid. On another renewable energy stock, NHPC, which has recently been in the limelight, Shah said the stock had traded below Rs 30 IPO price for a long time. But, due to changes made in government policies in the renewable energy sector in recent past, NHPC is expected to show improvement in results. Very recently, the stock showed correction, but in last one year, the scrip has doubled. On Friday, NHPC closed on the BSE at Rs 82 apiece.

Shah gave buy recommendations on another two stocks from different sector. He gave buy call on Zomato and Can Fin Homes. He gave price target of Rs 175 on Zomato for duration of 12-18 months or higher. On Friday, Zomato closed more than four per cent higher at Rs 159 per share on the BSE. Shah said Zomato’s Q3 FY24 results were very good. Looking at the quarterly results, he said he has given this price target.

Shah’s second pick is Can Fin Homes. He has given price target of Rs 900 per share on Can Fin Homes for duration of 12-18 months or longer. On Friday, the scrip closed at Rs 724 on the BSE.

In housing finance sector, Shah said he also likes LIC Housing Finance. He said, both these companies are financially strong.

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