These 4 PSU energy stocks have potential to yield up to 30% returns

Market expert Siddharth Sedani on Wednesday recommended buying shares of 4 public sector companies from oil and gas sector to Zee Business viewers for bumper returns. In a special segment ‘Sid Ki SIP’ aired on Zee Business, he said that the four companies — BPCL, Indian Oil, Mahanagar Gas and Chennai Petro are fundamentally strong and can yield up to 83 per cent return in 12 months.

He said that India’s fuel consumption has increased to 19.5 million tonnes which is the highest in 24 years. He added crude oil price is currently around $78 which is a positive good sign for these companies. 

He noted that India is also aiming to increase the market share of natural gas from 7 per cent to 15 per cent by 2030.

The 4 stocks recommended by Sedani are:

While recommending BPCL, Sedani said that fuel prices are stagnant and the fall in the price of crude oil is beneficial for the company. Further, he said that BPCL is the dominant player with 19,000 outlets and the company’s Q3 result was also impressive.

Target – Rs 384

Return- 18 per cent in a year 

Allocation- 30 per cent 

Also Read: Tax-saving FDs: These banks offer up to 8.5% interest on fixed deposits 

Mahanagar Gas 

The recent acquisition of city gas distribution company, Unison Enviro (UEPL) is a big positive for Mahanagar Gas as UEPL is the sole distributor of gas in Mumbai from PNG, CNG to LNG. Further, Sedani said that expansion volumes are expected to be 5 per cent in the upcoming 2 years and the company is planning to increase the capital expenditure from Rs 650 crore to Rs 800 crore. 

Target- Rs 1090

Returns- 11 per cent in a year 

Allocation- 30 per cent 

Also Read: Tax-saving FDs: These banks offer up to 8.5% interest on fixed deposits 

IOC

According to Sedani, the company will benefit from the robust demand in the coming year. 

Target- Rs 82 

Returns- 6 per cent in a year 

Allocation- 20 per cent 

Chennai Petro 

Sedani said that Q3 result of the company was impressive where GRM grew to $11.7. Sedani said that the working capital and debts of the company are reducing which is a positive and margins are growing as well. 

Target- Rs 355

Returns- 31 per cent in a year 

Allocation- 20 per cent

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