PSU oil refining and marketing firms, such as Hindustan Petroleum Corporation (HPCL), have always excelled in operational performance, even though they have been held back by the government-imposed subsidy burden. But with the current administration’s oil sector reforms, subsidy burden seems to be a thing of the past. There was no subsidy burden on HPCL in the third quarter of 2016-17.The company has reported good numbers for the first nine months of 2016-17 because of the relative stability in crude oil prices. Subsidy burden was one big reason for high working capital requirement in the past.HPCL’s fundamentals will improve further if the government sticks with its oil sector reform. The company has already got environmental clearance for its capacity enhancement plans at its Vaisakh and Mumbai refineries.We pick the stock that has shown the maximum increase in ‘consensus analyst rating’ in the past one month.

Source: Economic Times May 08, 2017 01:00 UTC