5 Stocks In Energy Sector

Asian Benchmark- Singapore Gross Refining Margin(GRM) has touched an all-time high of USD 25.2 per barrel driven by the sudden surge in refined fuel products demand globally.

The disparity arises due to supply chain disruption on account of sanctions on Russia, non-exports of Chinese refined products and supply chain disruptions. GRM is the margin earned by refiners on the conversion of crude oil into refined fuel products. The trajectory for GRM has been steep in last few quarters from USD 2 per barrel to USD 20 per barrel jumping 9X YoY, until recently when it touched USD 25.2 per barrel.

What this means to our domestic oil refineries has been evident in the phenomenal rally in their stock price. MRPL, CPCL, HPCL, OIL and Reliance Industries are reaping the benefits of the global tailwinds. Let us see how these companies are faring on the bourses since Monday, June 6 to date.

Mangalore Refinery& Petrochemicals Ltd(MRPL) has zoomed on the bourses benefiting from the recent global crude oil scenario. From June 6, in just three trading sessions the stock has gained a mindboggling 36.9% while logging a fresh 52-week high in the last 2 days. On June 9, it logged a fresh 52-week high at Rs 126.55. MRPL is a subsidiary of Oil and Natural Gas Corporation Limited (ONGC), which holds 71.63% equity shares. It is engaged in the business of refining crude oil. On YTD, MRPL has zoomed 181.5% on the bourses. At 11.15 am the stock was quoting at Rs 122.35, up 3.64% or Rs 4.30, touching a high of Rs 126.55.

Chennai Petroleum Corporation Ltd (CPCL), another pure-play oil refinery has surged 22.5% in last three trading sessions from Monday, June 6 to Wednesday, June 8. The stock has logged a fresh 52-week at Rs 416.90 on June 8, overwriting the June 7 52-week high of Rs 385.35. CPCL, a JV of GOI (Government of India) and National Iranian Oil Company (NIOC) is a smallcap company in the business of refining crude oil to produce and supply various petroleum products and manufacture and sale of lubricating oil additives.

On YTD, the benchmark index Sensex has lost 7.19%, while BSE Smallcap has lost a whopping 12.75% compared to CPCL’s outstanding performance on the bourses, which has seen a surge of 267%. In the morning trades, the shares of CPCL touched yet new 52-week high of Rs 390.10 and are currently quoting at Rs 378.40 up 0.96%.

Hindustan Oil Exploration Co Ltd (HOECL) has surged 12% in last three trading sessions while YTD the share has gained 13.57%. HOEC is engaged in the exploration, development and production of crude oil and natural gas in India, both onshore and offshore. The company has reported a net loss in Q4FY22 of Rs 27.58 crore, however, it reported EBITDA of Rs 20.9 crore which was up by 70% YoY. The share has been rallying in June recovering the loss of 12% in share price in May. In the morning session, the shares HOECL are trading at Rs 216.20, up 2.88% over its previous close.

Reliance Industries Ltd (RIL), the oil to telecom conglomerate has also seen a rally in its share price YTD of 14.8%. However, the benchmark heavyweight has to weather the volatile market sentiments in 2022 and as such in the last three trading sessions the share price is down by 1.9%. In the morning session, the shares of RIL are trading at Rs 2762.35 a gain of 1.14% or Rs 38.30 over its previous close.

Oil India Ltd (OIL)  is the biggest gainer in the energy sector in the morning session of June 9 wherein, it has soared 7.43% to Rs 300.8 over its previous close of Rs 280. It also touched its fresh 52-week high at Rs 302.80 overwriting the high on June 7 of Rs 301. In the last three trading sessions, it has risen 11.65%. The GOI owned entity is engaged in the business of exploration, development and production of crude oil and natural gas, transportation of crude oil and production of LPG.