Having witnessed major drawdowns this week, Oil India shares are once again in focus heading into trade on Friday, after Morgan Stanley predicted the stock to show further weakness in the next month.
In its latest note, Morgan Stanley believes Oil India share price will fall in absolute terms over the next 30 days. The brokerage firm has flagged four key concerns, stating that recent royalty rate changes are expected to have a 5% impact on Oil India's earnings.
Gas average selling price increases are likely to underperform Street estimates. Fuel refining profitability is set to drop by almost half as the impact of tax benefits unwinds. The brokerage also cited headwinds from slower-than-expected pipeline network expansion as an additional drag.
Within the upstream oil and gas segment, Morgan Stanley said it prefers ONGC over Oil India.
The note comes after a volatile week for the stock. Oil India shares retreated nearly 10% on Wednesday before recovering approximately half a percent on Thursday.
The stock remains under pressure amid broader concerns over the upstream sector's earnings trajectory, compounded by the West Asia conflict's impact on global energy markets.
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