Shares of Oil companies are selling like hot cakes. Know why

Shares of BPCL, HPCL and Indian Oil were in heavy demand after Citigroup raised its price estimates on all three PSU companies owing to a tepid global environment for crude oil, their main raw material purchase.

BPCL rose 1.2 percent to 960.95 rupees. HPCL gained 1 percent to quote at 881.25 and Indian Oil added 2 percent at 443.

Citigroup said it expects marketing margins for all three OMCs to stabilize with an upward bias owing to deregulation of pricing in the sector. It forecasts improved earnings outlook, an enhanced earnings mix and undemanding valuations in its matrix.

Citigroup raised its price target on HPCL to `1,106 from `749. Target on BPCL raised to `1,062 from `932 and on IOC to `506 from `407.

(Image credit: Indiatimes)