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Stocks in focus: Oil stocks are expected to trend today when the market opens for Friday deals. Reason behind this is Government of India (GoI) further reducing the windfall tax on exports of locally produced oil and diesel. This is expected to boost oil refining margins of the oil producing companies that are in oil export business. So, oil stocks like Reliance Industries Ltd (RIL), Indian Oil Corporation Limited or IOCL, Hindustan Petroleum Corporation Limited or HPCL, Bharat Petroleum Corporation Limited or BPCL, etc. are expected to reamin in focus during Friday morning deals.

Speaking on the reason for oil stocks being in focus today, Avinash Gorakshkar, Head of Research at Profitmart Securities said, 'The GoI has further reduced the windfall tax on oil exports of domestically produced oil and diesel. This is going to help oil exporting companies to improve their refining margins, leading to better quarterly numbers in coming quarters. Apart from this, crude oil prices have already cooled down in recent sessions. So, market is expecting better quarterly numbers from oil exporting companies in near quarters."

Asked about the oil exporters who would benefit from this windfall tax reduction, Avinash Gorakshkar said, "The benefit would mainly come to the oil exporter companies like Reliance Industries, HPCL, ONGC, Oil India Ltd, BPCL, IOCL, etc."

Oil stocks to buy today

Advising stock investors to take advantage of this windfall tax reduction, Sumeet Bagadia, Executive Director at Choice Broking said, "Reliance and BPCL shares are looking positive on chart pattern. One can buy Reliance shares at current market price for the short term target of 2800 to 2900 levels. But, one must maintain stop loss at 2650 while taking position in Reliance shares. A positional investor can look at BPCL share as well. BPCL shares may go up to 360 to 375 apiece levels in short term. One can buy BPCL stocks for above mentioned target maintaining stop loss at 327 levels."

Windfall tax news

On 1st December 2022, GoI reduced windfall tax on crude oil export from 10,200 per tonne to 4,900 per tonne. In its fortnightly revision of windfall tax, the GoI also reduced duty on diesel export from 10.50 per litre to 8 per litre. These changes have become effective from 2nd December 2022 i.e. from today.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Asit Manohar

Chief Content Producer at Live Mint Digital Team
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