Equity Alert: ONGC, GAIL shr up; CLSA says fuel price hike positive

[K.Karthik Raja]

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Equity Alert: ONGC, GAIL shr up; CLSA says fuel price hike positive
MUMBAI--11:10AM--Oil & Natural Gas Corp was up 5.97% at 940
rupees, and
GAIL India up 4.7% at 389 rupees as the fuel price hike and other
government
measures announced Wednesday are seen reducing the subsidy burden on
the
public sector companies.
CLSA Asia-Pacific Markets said in a report Wednesday's measures
are
positive for GAIL India and Oil & Natural Gas Corp.
The brokerage expects the upstream oil companies to bear a burden
of
around $15 bln (643.5 bln rupees), while Citigroup sees the subsidy
burden at
450 bln rupees in 2008-09 (Apr-Mar).
CLSA said the cut in customs duty on crude to 0% would be negative
for
ONGC while the cut in customs duty on petrol and diesel, price hike
and
excise cut would be positive.
The brokerage sees a gain of 10 rupees a share for ONGC and lower
LPG
losses leading to a 3% rise in GAIL's earnings per share.
However, it has maintained its earnings estimates for ONGC citing
"risk
on production growth, high middle-distillate cracks".
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