Morgan Stanley bullish on 4 gas stocks if natural gas is included in GST
Morgan Stanley predicts bullish trends for gas stocks following the inclusion of natural gas under GST. E&P giants like ONGC and Oil India are poised to benefit most, with estimated upsides of 5% and 3-4% respectively in earnings. Operational efficiencies and cost reductions are expected, enhancing prospects across the natural gas value chain.
Citing the inclusion of natural gas under GST, global brokerage is bullish on . The brokerage believes this move could significantly benefit the entire natural gas value chain, offering a range of advantages to various stakeholders.Morgan Stanley identifies Exploration and Production (E&P) companies, specifically ONGC and Oil India, as the primary beneficiaries of this policy change. The brokerage estimates a potential 5% upside to ONGC's standalone earnings and a 3-4% upside for Oil India. This optimistic outlook is grounded in the anticipated operational efficiencies and cost reductions resulting from the GST inclusion.
The analysis also highlights the positive implications for other players in the natural gas sector. Indraprastha Gas Limited (IGL) and are expected to benefit as natural gas becomes a more favourable alternative to other fuels. This shift is likely to enhance their market positions and profitability in the long run.
Meanwhile, the global brokerage has given an 'Overweight' rating to several gas stocks, including , Gujarat Gas, ONGC, and Oil India.
Morgan Stanley has set a Rs 255 target price for GAIL, indicating an upside potential of 17.5%. The brokerage has given a Rs 302 target price for ONGC, an upside potential of 9%. Additionally, the target price for Oil India is Rs 745, signalling an upside potential of 12% from the current market price.
As of 10:47 am, shares of GAIL were trading 2.5% higher at Rs 217, while shares of Gujarat Gas were trading nearly 1% higher at Rs 615 on the BSE. At the same time, were trading 1.3% higher at Rs 277, and were trading 2.4% higher at Rs 664.
Additionally, Petronet LNG has a target price of Rs 239, rated as 'Equal-Weight'. The brokerage anticipates that both GAIL and Petronet LNG will benefit from the growing gas consumption in India.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Source: Stocks-Markets-Economic Times
