IFSCCodeof.in

Stocks from the oil and gas sector to buy according to Sharekhan

City gas distribution companies to do well

According to Sharekhan, the City gas distribution companies (excluding Gujarat Gas) are likely to report strong earnings growth y-o-y, led by sharp volume growth and strong margin and gas utilities (especially GAIL) would benefit from substantial improvement in profitability of gas marketing business and volume growth across segment.

“Oil marketing companies earnings performance is expected to be mixed as sharp recovery in refining & marketing margins would get largely offset by lower inventory gain, subdued refinery utilisation for HPCL and sequential moderation in petchem margin for IOCL. Upstream PSUs (ONGC and Oil India) are likely to report high earnings growth led by increase in oil price and lower operating cost. We expect Reliance Industries’ (RIL) earnings to grow by 9% q-o-q led by mode,” the brokerage has said.

Oil marketing companies to be a mixed bag

According to Sharekhan, oil marketing companies like IOCL, BPCL and HPCL core earnings will witness significant improvement as gross refining margins are on recovery mode (Singapore complex GRM up 76% q-o-q to $3.7/bbl) and diesel/petrol marketing margin expected to improve sharply to Rs. 5.6/Rs. 3 per litre versus only Rs. 4.1/Rs. 1 per litre in Q1FY22.

“However, on reported basis the performance would be mixed due to lower inventory gains q-o-q, weakness in HPDE margin on higher naphtha price for Indian Oil Corporation and subdued refinery utilisation for HPCL.

We expect IOCL/BPCL/HPCL PAT to witness -4%/30%/7% q-o-q earnings growth in Q2FY22. For Reliance Industries, we expect net profits to increase by 9% q-o-q to Rs. 13,324 crore led by modest growth in the oil to chemicals business as higher gross refining margins to get offset by lower petchem margin, decent performance by Jio supported by 4%/1% q-o-q increase in subscribers/ARPU to 460 million and Rs 140 per month respectively and strong q-o-q retail EBITDA growth led by demand recovery,” the brokerage has said.

HPCL and BPCL preferred stock picks from the OMC space

“We prefer HPCL and BPCL among oil marketing companies given cyclical earnings recovery and potential re-rating on successful privatisation (expected by March 2022) of BPCL. We prefer GAIL and GSPL among gas utilities, as it is a play on rising domestic gas demand and is available at attractive valuations,” the brokerage has said.

Disclaimer

The stocks recommended above are taken from the brokerage report of Sharekhan. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies Pvt Ltd, the author, and the analysts are not liable for any losses caused as a result of decisions based on the article. The above article is for informational purposes only.

Canara Robeco Conservative Hybrid Fund

Canara Robeco Mutual Fund established this Conservative Hybrid mutual fund scheme, which has been in operation for the past 8 years. The fund’s expense ratio is 0.61 percent, which is lower than the expense ratio charged by most other funds in the same category. The fund currently has a 22.80% equity allocation and a 69.70% debt exposure. Canara Robeco Conservative Hybrid Fund Direct-Growth returns in the previous year were 16.77 percent, according to Value Research, and it has generated 10.56 percent average annual returns since its inception.

The financial, automobile, healthcare, services, and technology sectors make up the majority of the fund’s equity holdings. National Bank For Agriculture & Rural Development, Tamilnadu State, Housing Development Finance Corpn. Ltd., Gujarat State, and GOI are the fund’s top five holdings. CRISIL has given the fund a “No 1” rating, Value Research has given it a 5-star rating, and Morningstar has given it a 5-star rating, indicating the fund’s previous performance strength during market peaks and troughs.

As of 6th October 2021, the fund has a Net Asset Value (NAV) of Rs 82.22 and has an Asset Under Management (AUM) of Rs 896.35 Cr. The fund charges an exit load of 1% if units of more than 10% are redeemed within 12 months of the purchased date. SIP in this fund can be started with a minimum amount of Rs 1000 per month.

LIC MF Debt Hybrid Fund

This fund invests predominantly in debt instruments with marginal equity exposure. This Conservative Hybrid mutual fund scheme was founded by the fund house LIC Mutual Fund in the year 1998 and is a medium-sized fund of its category. The fund has a 2.27 percent expense ratio, which is higher than most other Conservative Hybrid funds.

As of August 31, 2021, the fund has a 24.75 percent equity allocation and a 75.24 percent debt exposure. The recent one-year growth returns of the LIC MF Debt Hybrid Fund were 12.13 percent, and it has generated an average annual return of 8.51 percent since its inception. The equity part of the fund is largely invested in the technology, financial, fast-moving consumer goods, energy, and healthcare sectors. Reserve Bank of India, GOI, Infosys Ltd., ICICI Bank Ltd., and Larsen & Toubro Infotech Ltd. is the fund’s top five holdings.

The fund has received a “No 1” rating from CRISIL, a 3-star rating from Value Research, and a 3-star rating from Morningstar, reflecting the fund’s consistent historical performance in terms of generating gains. The fund has a Net Asset Value (NAV) of Rs 71.58 and an Asset Under Management (AUM) of Rs 83.85 Cr as of October 6, 2021.

If units worth more than 12 percent are redeemed within 12 months after the acquisition, the fund imposes a 1% exit load. SIPs in this fund can be commenced with as little as Rs 1000 per month.

2 High Rated Conservative Hybrid Funds To Start SIP In 2021

Based on CRISIL’s ranking of No.1 and past performance, here are the 2 conservative hybrid funds that you can consider to start SIP in 2021 for at least 3 years.

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advice to buy or sell stocks, gold, currency, or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates, and authors do not accept culpability for losses and/or damages arising based on information in GoodReturns.in