Shares of Oil and Natural Gas Corporation (ONGC) fell as much as 3.65 percent intraday Thursday after Cabinet Committee on Economic Affairs (CCEA) deferred its decision on gas price hike again.
"The Cabinet has deferred decision on gas pricing. The decision on gas pricing will be taken before November 15," said Law Minister Ravi Shankar Prasad on Wednesday.
On June 25, the CCEA had decided to delay the decision on gas price hike by three months to end-September 2014.
Therefore, Bank of America Merrill Lynch (BoAML) cut earnings per share estimates (FY15) for ONGC and Oil India by 2 percent on assumption of change in average gas price for the current financial year.
"We are now assuming the gas price is hiked to USD 6.5/million metric British thermal units (mmbtu) from November 16 (ie, for 4.5 months in FY15E) vis-à-vis from October 1 assumed earlier. Thus, we are now assuming an average FY15E gas price of USD 5.06/mmbtu (USD 4.2/mmbtu for 7.5 months and USD 6.5/mmbtu for 4.5 months) vis-à-vis USD 5.35/mmbtu earlier," it explained.
The brokerage expects no further delays now. It retains buy on ONGC and Oil India but cut price target on OIL by 0.3 percent to Rs 775/share.
BoAML expects the decision on gas pricing to be taken before the Supreme Court hearing due on November 14.
"The Supreme Court (SC) is hearing two public interest litigations (PILs) against a price hike for gas from RIL's KG D6 block. The SC had in its last hearing on September 18 asked the government to clarify its stand on the gas price hike decision taken by the UPA government, which was challenged by two appellants. The government's lawyer had informed the SC that the decision on gas pricing would be taken by the government and an affidavit would be filed with the SC. The SC has posted the matter for further hearing on November 14," said the brokerage.
According to the report, SC may not play any role in gas pricing issue. The three judge bench of the SC, which was hearing the PILs against the KG D6 gas price hike, was reconstituted following retirement of the head of the bench.
"The head of the new bench has indicated in our view that the SC may not play any role on the gas pricing issue, especially if the NDA government rejects the gas price formula approved by the UPA government and fixes the gas price at a lower level," the brokerage elaborated.
BoAML feels the NDA government will fix the gas price at USD 6-7/mmbtu vis-à-vis USD 8-9/mmbtu per the UPA government approved formula.
Its perception is based on comments by the judge "Why should we determine whether a price hike is justified or not? If the government does something, it will be questioned in the Parliament."
At 11:55 hours IST, the scrip of ONGC was down 2.42 percent to Rs 403.55 and Oil India fell 1.23 percent to Rs 602 on the BSE.
Posted by Sunil Shankar Matkar
Anda sedang membaca artikel tentang
ONGC slips 4% on gas price hike deferral, BoAML cuts EPS
Dengan url
https://rokokkanker.blogspot.com/2014/09/ongc-slips-4-on-gas-price-hike-deferral.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
ONGC slips 4% on gas price hike deferral, BoAML cuts EPS
namun jangan lupa untuk meletakkan link
ONGC slips 4% on gas price hike deferral, BoAML cuts EPS
sebagai sumbernya
0 komentar:
Posting Komentar