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Amidst the tension and conflict that has been going on for a long time in West Asia, now a very relieving news is coming out for the investors of the Indian stock market. The murmur of the complete opening of the Strait of Hormuz, considered the most important sea route for trade at the global level, has become very strong once again. The smooth resumption of supply of ships through this very special route directly means that a huge decline can be seen in the prices of Crude Oil and LNG in the international market. This whole situation is going to prove to be very positive and beneficial for the Indian economy, because India fulfills a large part of its energy needs by importing or purchasing it from abroad.

Amidst such a changing environment, the world’s leading brokerage firm Nomura clearly believes that due to softening of crude oil prices in the international market, India’s Oil Marketing Companies (OMCs) and City Gas Distributors are going to make huge profits in the coming days. To capitalize on this wonderful market opportunity, the brokerage house has prepared a special list of some of its favorite stocks, which can make investors rich by giving them bumper returns in the coming times.

The fortunes of these oil companies will shine with cheap crude oil.

It is a simple rule of the stock market that whenever the crude oil coming from abroad becomes cheaper, the profits of the government companies that refine oil in India and deliver it to the customers in the form of petrol and diesel increase significantly. Nomura has expressed maximum confidence in Indian Oil Corporation (IOC) in this regard. While giving ‘Buy’ rating to IOC shares, the brokerage has set a big target price of Rs 180 for it, which shows an impressive growth of about 25 percent from its current market price. Experts believe that with the improvement in supply from the Strait of Hormuz, there will be a huge reduction in the cost of LPG import, due to which the company’s profit margin can break all the old records.

Similarly, Bharat Petroleum Corporation Limited (BPCL) is also currently included in the top list of brokerage’s favourites. Nomura has set a target price of Rs 365 for BPCL shares. This company is expected to get the first and biggest direct benefit from falling crude oil prices, due to which its shares may see a huge rise of up to 18 percent.

Fall in gas prices will bring rise in these 4 stocks

Apart from the raw materials of petrol and diesel in the international market, this time is going to prove to be no less than a boon for the companies importing City Gas Distribution (CGD) and LNG. In its latest report, Nomura has advised to immediately invest money in these four major gas companies:

Nomura currently looks most bullish i.e. positive on Gujarat Gas shares. The brokerage has advised investors to include it in their portfolio with a target of Rs 511. Due to cheap prices of gas, its demand and consumption in industries will increase very rapidly, due to which investors can directly get huge profits of up to 28 percent.

Mahanagar Gas has a good exposure to very cheap gas connected to the ‘Henry Hub’ of the global market. In such a situation, if there is even a slight reduction in the cost of gas imported from abroad, the profits of this company will start flying like a rocket. Nomura has given a target of Rs 1,430 to this stock, which is a clear indication of a strong return of about 26 percent from the current price.

The path is also going to be easy for Petronet LNG. After the normalization of LNG supply from Qatar, the use of regasification terminals of this company will increase very rapidly. The brokerage has given its ‘Buy’ rating to this stock with a target of Rs 345, in which an upside of 21 percent is expected.

GAIL India will also get a big benefit from this entire development. The increase in import of LNG in the country will have a direct and positive impact on its gas transmission volume (quantity of gas supply). Nomura has given a target price of Rs 195 for GAIL’s shares, in which an increase of up to 11 percent can easily be seen in future.

These companies selling expensive oil will face a big blow

There are always two different sides to any global event or major change in the stock market. While on one hand, the downstream companies i.e. Oil Marketing Companies (IOC, BPCL) are going to be in profit due to cheapness of crude oil in the international market, on the other hand, huge pressure will be clearly seen on the domestic companies producing crude oil themselves. According to Nomura report, the entire earnings and profits of upstream companies like ONGC and Oil India directly depend on the high prices of crude oil and gas. In such a situation, if oil prices come down rapidly in the global market, there can be a big dent in the profits and earnings of these government companies, due to which the risk of fall in their shares will increase.