- Prime Minister Modi urged Indians to conserve fuel amid the Middle East crisis
- He recommended reducing foreign travel and postponing non-essential gold purchases
- Oil firms like Indian Oil and Bharat Petroleum may benefit from lower fuel demand
Prime Minister Narendra Modi's call for Indians to conserve fuel, avoid unnecessary foreign travel and even postpone non-essential gold purchases has put a wide swathe of stocks in focus, from oil marketing companies to consumer and hospitality names.
Speaking at an event in Telangana yesterday, Modi urged citizens to use imported petroleum products 'only as per need' in light of the ongoing Middle East crisis. He also revived several Covid-era practices, including work-from-home arrangements, online meetings and virtual conferences, arguing that reducing fuel consumption would help conserve foreign exchange reserves and cushion the economy from the impact of higher crude prices.
ALSO READ: Modi Revives Covid Playbook — Work From Home, Carpool, Cut Travel — As Crude Surges
For oil marketing companies, the message is quite positive. Lower fuel consumption may ease the burden of under-recoveries if retail prices remain unchanged while global crude stays elevated.
Stocks such as Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. could benefit if demand moderation reduces inventory and pricing pressures.
The broader impact, however, may be less favourable for consumption-linked sectors. A reduction in discretionary spending, travel and jewellery purchases could weigh on June-quarter earnings for companies such as Titan Company, Kalyan Jewellers India and ITC Limited.
Airlines and hotel operators, including InterGlobe Aviation, Indian Hotels Company, Lemon Tree Hotels, Chalet Hotels, EIH Limited and ITC Hotels may also face near-term pressure if corporate travel and leisure demand soften.
Modi also encouraged households to cut edible oil consumption, prioritise Made-in-India products and choose domestic tourism over overseas holidays.
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