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    Shares of refiners, producers tumble

    Synopsis

    Among oil producers, ONGC tumbled 13.4%, Oil India slumped 15.1% and Vedanta declined 4% while among refiners, Mangalore Refinery & Petrochemicals Ltd (MRPL) fell 10% and Chennai Petroleum Corporation Ltd (CPCL) shed 5.2%. The BSE Energy index was the biggest laggard among sector indices, down 4%.

    Shares of refiners, producers tumbleiStock
    Mumbai: India's most valued company Reliance Industries Ltd (RIL) fell on Friday as shares of oil refiners and producers slumped after the government imposed an export tax on petrol, diesel and aviation turbine fuel (ATF) as well as a windfall tax on crude oil produced locally. The measures dented market expectations of further record profits, which have been driven by elevated oil prices and a global energy deficit, said analysts.

    RIL shares dropped 7% - the biggest single-day fall since November 2020 - to Rs 2,408.95 on Friday. That weakness weighed down the Sensex and Nifty, which ended about 0.2% lower.

    Among oil producers, ONGC tumbled 13.4%, Oil India slumped 15.1% and Vedanta declined 4% while among refiners, Mangalore Refinery & Petrochemicals Ltd (MRPL) fell 10% and Chennai Petroleum Corporation Ltd (CPCL) shed 5.2%. The BSE Energy index was the biggest laggard among sector indices, down 4%.

    With about 58% of RIL's refined products being exported, the blended impact for the company could be about ₹3.4 per litre, translating to around $7 per barrel impact on realised gross refining margin, said Jefferies. "This will be a short-term hit on the Reliance stock as it is sentiment negative," said Siddarth Bhamre, research head at Religare Securities. "Refiners have been making windfall gains on these exports in the current scenario."

    The new tax and export restrictions could hurt the earnings of ONGC, Oil India and RIL, said analysts. "The earnings impact on RIL could be 7-8% and in the case of ONGC the impact could be as high as 40-50%," said Hemang Jani, head of equity strategy, broking and distribution, Motilal Oswal Financial Services. "It is a big setback for upstream companies as profits will get taken away at a time of crude upcycle. The government will review this on a fortnightly basis which adds to an element of uncertainty."

    Domestic oil marketing companies HPCL and BPCL gained 5.2% and 3.1%, respectively, after the government's measures.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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