ONGC could see a massive profit from the Iran-Israel conflict! Shares could become rockets
The Iran-Israel war could send crude oil prices skyrocketing worldwide. While this tension has created fear in the global market, India's state-owned oil company, ONGC, could be in for a treat. The rising crude prices will boost the company's profits significantly. Consequently, ONGC shares could soar as soon as the market opens on Monday.
Tensions in the Gulf countries have now reached a dangerous point. The US and Israel have jointly launched Operation Epic Fury, a major offensive against Iran. This includes massive air and sea attacks on several Iranian bases.
Iran has retaliated by targeting US military bases in Qatar, Kuwait, and the UAE with its missiles.
This all-out war will directly impact the heart of the global economy: crude oil. While stock markets around the world are experiencing panic, this crisis in the Indian stock market has presented a significant profit opportunity for a state-owned company.
ONGC shares may see a huge jump
While fears of a market crash and panic grip the entire market, this geopolitical crisis could yield significant economic benefits for India's giant state-owned company,
Oil and Natural Gas Corporation (ONGC). It's a simple economic principle that when international crude oil prices skyrocket, companies that extract oil from land and sea thrive.
Since ONGC's primary business is exploration and production, when crude oil prices rise, the company will be able to sell its extracted oil at much higher and more attractive rates in the international market.
The direct and significant benefit of this will be a significant increase in the company's earnings per barrel and its overall profit margin. This is why, when markets open on Monday, investors are likely to see heavy buying in ONGC shares.
ONGC shares have risen 23.91 percent
Investors' confidence in this government-owned company is already strong in the stock market. Looking at the data over the past year,
ONGC shares have seen a remarkable jump of approximately 23.91 percent. Meanwhile, since the beginning of this year, its shares have registered a strong gain of 17.30 percent.
The company's stock is currently trading at around ₹279. The company's excellent performance can be gauged from the fact that it recently touched a 52-week high of ₹282.50. Amid this renewed surge in crude oil prices, the stock appears poised to set another record.
One's gain is another's loss.
Every event in the stock market has two sides. While the rising crude oil prices are a boon for oil producing companies like ONGC,
it also spells danger for some of India's other giants. Oil marketing companies like Indian Oil (IOCL), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) purchase crude oil and refine it at their refineries.
Crude oil serves as a raw material for these petroleum companies. When raw materials become more expensive in the market, the costs of these refining companies will increase significantly, threatening to shrink their profits.