Market interest revives in oil marketing companies; consumer firms back in focus too

On the back of the falling crude oil prices, the Street seems to be focusing on oil marketing companies such as IndianOil and Bharat Petroleum which will be the biggest beneficiaries. However, consumer companies will also gain as 25-60%% of their cost of goods is directly or indirectly linked to crude prices and raw material is 40-60% of sales.

For instance, prices of raw materials such as palm oil and packaging material are linked to crude prices. This include Bajaj Corp, Pidilite, Asian Paints, Berger Paints, HUL, Jyothy Lab and Dabur.

In addition, petrol prices are now market-linked and lower crude means lower petrol prices. This augurs well for passenger vehicles and two-wheeler makers such as Maruti, Hero, TVS and Bajaj Auto. With the gap between diesel and petrol prices narrowing, demand for petrol vehicles may revive in the coming quarters.