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ONGC, Oil India surge 5%; gain up to 41% in 6 months on high oil prices

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ONGC, Oil India surge 5%; gain up to 41% in 6 months on high oil prices

Shares of state-owned oil exploration & production companies – Oil Natural Gas Corporation (ONGC) and Oil India – rallied up to 10 per cent on the BSE in Wednesday’s intra-day trade as oil prices surged to their highest levels since 2014.

Brent crude oil prices extended gains as the conflict in Ukraine escalated, fanning fears of lower supply from the top oil exporter. Western countries have also slapped fresh sanctions on Russia in response to the invasion of Ukraine, and Russian President Vladimir Putin responded by putting his country’s nuclear deterrent on a high alert.

Brent futures rose nearly 5 per cent on Wednesday to top $110 a barrel-mark, their highest since 2014, as a global agreement to release crude reserves also failed to calm fears about supply disruptions from Russia’s invasion of Ukraine, news agency Reuters reported.

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Among individual stocks, Oil India surged 9.8 per cent to Rs 245, while ONGC gained 4.6 per cent at Rs 168.05 on the BSE in intra-day. In comparison, the S&P BSE Sensex was down 1 per cent at 55,649 at 09:30 am. In the past six months, ONGC and Oil India have outperformed the market, having rallied 41 per cent and 30 per cent, respectively, as against a 3.8 per cent decline in the benchmark index.

Earnings outlook for upstream PSUs has improved considerably given the recent rise in crude oil prices at above $90/bbl mark and expectation of a further steep hike in domestic gas price over H1-H2FY23 on current gas price of $2.9/mmBtu. High oil & gas prices would boost overall profitability of ONGC and OIL. However, oil and gas production are expected to recover gradually with majority of the growth being back-ended (i.e. by FY2024E-FY2025E).

“The recent sharp surge in crude oil prices and expectation of further steep hike in domestic gas prices from April 2022 would drive a 40 per cent CAGR in Oil India’s standalone profit after tax (PAT) over FY2021-FY2024E and improve RoE to 12.5 per cent (versus only 5.4 per cent in FY2021). Moreover, the recent stake increase in Numaligarh Refinery (NRL) could create long-term value for Oil India,” brokerage firm Sharekhan said. It maintains a ‘Buy’ rating on Oil India with a revised SoTP-based price target of Rs 290.

Complete News Source : Business Standard

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Pahalgam Attack

Pachigam attack aftermath: International airlines avoid Pakistani airspace amid tensions with India

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Pachigam attack aftermath: International airlines avoid Pakistani airspace amid tensions with India

Due to a lengthier path, Lufthansa Flight LH760 from Frankfurt to New Delhi had to fly for over an hour longer on Sunday. Major foreign airlines, including Air France and Lufthansa, are avoiding Pakistani airspace as tensions between India and Pakistan remain high after a deadly terrorist assault in Pahalgam, Jammu and Kashmir, according to airlines and flight trackers on.

Monday. Air France agreed, stating that it had decided to halt flights over Pakistan due to the “recent evolution of tensions” between the two South Asian foes. “The airline has decided to suspend overflight of Pakistan until further notice,” Air France said in a statement, referring to the “recent evolution of tensions” between India and Pakistan The airline currently changing.

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In the wake of the recent Pachigam terror attack, a significant shift in international aviation routes has occurred. Following an uptick in security concerns and rising geopolitical tensions between India and Pakistan, several international airlines have opted to avoid Pakistani airspace, rerouting their flights to ensure passenger safety. The decision comes nations.

The Pahagam Terror Attack: A Trigger for Renewed Tensions

On the night of the attack in Pachigam, a popular tourist destination in Jammu and Kashmir, militants carried out a series of strikes on civilian and military targets. The assault left a number of casualties, both military personnel and civilians, sparking widespread condemnation. The attack, attributed to militant groups operating from across the border.

Airlines’ Concerns Over Safety and Security

In response to the escalating threat in the region, several international airlines, including prominent carriers from Europe, the Middle East, and Asia, have started to reroute their flights to avoid crossing Pakistani airspace. These precautionary measures, while not unprecedented, are a direct reflection of the security situation that has worsened in the wake of the attack.

Airlines typically rely on international aviation corridors for the fastest and most efficient flight paths, and Pakistani airspace has historically been a critical component of many international routes connecting Europe and Asia. However, in light of the heightened risk of military conflict, commercial carriers have begun to take proactive steps to avoid the region.

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European carriers, such as Lufthansa and Air France, have adjusted their flight paths over the past few weeks, choosing to bypass Pakistan altogether. Similarly, Middle Eastern giants, like Emirates and Qatar Airways, have rerouted certain flights to avoid potential risks associated with flying in close proximity to the disputed borders. These changes have led to longer flight.

The International Air Transport Association (IATA) has noted that these changes, while necessary, come with considerable logistical and financial consequences. Airlines must navigate alternative routes, which may lead to higher fuel consumption and longer durations of travel. Nevertheless, passenger safety is the highest priority, and the industry remains.

Diplomatic Implications and Regional Stability

The rerouting of international flights has far-reaching implications, not only in terms of aviation logistics but also for regional diplomacy. The decision to avoid Pakistani airspace can be seen as a subtle but clear indication of the international community’s concerns regarding with the growing uncertainty in the region, underscores the volatile nature of South the security situation between India and Pakistan. Such moves may further isolate Pakistan.

The Future of Aviation in the Region

As the situation unfolds, the aviation industry is closely monitoring developments. For international carriers, navigating the delicate balance between commercial operations and national security concerns is no small task. In the coming weeks, further changes in flight patterns are expected, depending on how the diplomatic and military tensions between India.

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