India's oil and gas firms' margins may take a hit due to macro headwinds, Motilal Oswal says

GAIL (India)

13/01/2026 05:58

** Motilal Oswal flags intensifying macro headwinds for India's oil and gas sector, resulting in narrowing the margin of safety across the board

** Brokerage says depreciation in rupee vs the U.S. dollar continues to weigh on OMC/CGD margins, partially offsetting benefits from softer crude prices O/R

** Motilal says refining margins have moderated since November as planned maintenance concluded and incremental global capacity came onstream, limiting earnings upside from current levels

** Notes rise in Henry Hub gas prices are pressuring margins and diluting the benefit of structurally lower domestic gas costs

** Sector stocks (excluding OMCs) have corrected meaningfully from recent peaks, but current valuations still do not reflect maximum pessimism, Motilal says

** Brokerage top picks in the sector are Hindustan Petroleum HPCL.NS, GAIL (India) GAIL.NS and Mahanagar Gas MGAS.NS

** India's Oil & Gas index .NIFOILGAS down 0.2%

 (Reporting by Brijesh Patel in Bengaluru)

 ((Brijesh.Patel1@thomsonreuters.com; Ph no. +91 9590227221;))