The ongoing Iran conflict and the resulting disruption in global energy markets have triggered a sharp correction in several Indian stocks linked to gas, petrochemicals and infrastructure. However, despite the sharp fall, analysts believes some of these stocks may offer significant upside from current levels, making them potential opportunities amid the market crash.
GAIL
GAIL has fallen over 20% month-to-date amid force majeure and run cuts due to gas supply disruptions. The fall in gas availability has impacted transmission volumes in the near term. However, the stock is currently trading at a PE of 7.17, making it one of the cheapest stocks in the sector. The stock could sees around 40% upside driven by its strong pipeline network and long-term gas demand outlook.
Petronet LNG
Petronet LNG has been the worst hit among the lot, falling over 26% after declaring force majeure to offtakers such as GAIL, IOCL and BPCL due to supply disruptions. The stock now trades at a PE of 9.06. Analysts see an upside potential of nearly 35% as LNG demand remains structurally strong and the current disruption is seen as temporary.
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Larsen & Toubro
Larsen & Toubro has fallen nearly 22% in the recent market correction. However, the company has indicated that it is not seeing any major impact on its business from the ongoing crisis. This suggests the fall is largely sentiment-driven rather than fundamentals-driven. Analysts see around 36.5% upside in the stock, supported by a strong order book and execution pipeline.
PG Electroplast
PG Electroplast has declined over 21% due to shortages of gas and LPG, which have impacted production. Despite this, analysts sees the highest upside potential in this stock at around 46.4%, although the valuation remains expensive at a PE of 46.82. The recovery will depend on how quickly supply disruptions ease.
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