EQUITY ANALYSIS OF OIL

AND NATURAL GAS SECTOR

COMPANIES
 INTRODUCTION
• Capital market is financial market where investment instruments
like bonds, equities and mortgages are traded. It offers both long
term and overnight funds.
• There are two types of capital market – primary market which
deals with fresh issues and secondary market which deals with
the buying and selling of previously issued securities.
• The four main legislations governing the capital markets are :
The SEBI act, 1992
The companies act, 1956
The securities contract act, 1956
The Depositaries act, 1996
• The capital market is regulated by SEBI.
 INDUSTRY PROFILE
INTRODUCTION TO OIL AND NATURAL GAS SECTOR
The oil and gas industry in India dates back to 1889 when the first oil deposits in the
country were discovered near the town of Digboi in the state of Assam. The natural gas
industry in India began in the 1960s with the discovery of gas fields in Assam and
Gujarat. As on 31 March 2018, India had estimated crude oil reserves of 594.49 million
tonnes and natural gas reserves of 1339.57 billion cubic meter.
India imports 82% of its oil needs and aims to bring that down to 67% by 2022 by
replacing it with local exploration, renewable energy and indigenous ethanol fuel. India
was the third top net crude oil (including crude oil products) importer of 189 Mt in 2017.
The top players in India being
• Indian oil
• Reliance Industries limited
• ONGC
• Hindustan petroleum corporation limited
• Bharat petroleum corporation limited
• Royal Dutch Shell
 SECTOR PROFILE
1. Bharat petroleum Corporation Limited
Sector : oil and gas
category : large cap (737.55 billion)
2. Hindustan petroleum Corporation Limited
Sector : oil and gas
category : large cap (356.89 billion)
3. Indian oil
Sector : oil and gas
Category : large cap (1.21 trillion)
4. ONGC
Sector : oil and gas
Category : large cap (1.75 trillion)
 COMPANY PROFILE
JMarathon ADVISORY SERVICES PVT. LTD

CEO : Magesh
Founded : 2012
Guide : Ragul R
No of employees : 25
Branch : Chennai
 REFERENCES
• Sibanjan Mishra “ Technical Analysis and Risk Premium in Indian
Equity Market: A Multiple Regression Analysis “

In this paper the purpose is to estimate the effectiveness of technical

trading strategies and examine the extent to which trading profitability
using technical analysis indicators explains the ‘risk premium’or ‘risk
compensation’ for investing in equity markets as against assets that are
relatively risk-free using multiple regression analysis. The technical
indicators selected for the analysis are Bollinger bands (volatility
indicator), moving average (trend indicator), Relative Strength Index
(momentum indicator), and Elliot wave theory (mass psychology
indicator). The paper finds evidence for risk premium being explained by
technical indicators. The technical trading strategy based on trend,
momentum, volatility indicators, including the Elliot wave theory has the
ability to explain the excess return of a stock. The findings have important
implications for traders and practitioners. A positive relationship implies
that technical indicators can be explored while evaluating strategies for
investment. So, it suggests that traders, retail investors and fund managers,
while evaluating portfolios, can rely on technical indicators-based trading
strategies other than fundamental analysis
PATIL, ASHOK; MADHURI, GITA , June 2018 “Oil price shocks
and Stock Market Performance: A Case of Indian Stock Market”

In this paper, the purpose is to study the empirical relationship between Oil
Price Shocks and Stock Market Index movement and their asymmetric
responses to oil price shocks. The Indian stock market index was
represented by Sensex, and daily closing prices of Sensex and crude oil
prices for a ten-year period between 2006 and 2015 wereanalyzed using
dynamic linear regression or ARIMAX. The study indicated that there is no
significant evidence of correlation between oil price shocks
and stock market index movement; however, stock market index movement
is auto-correlated with its two lags. The findings of this paper also show
statistically significant asymmetric responses of stock market index
movement to oil price shocks. Stock market index movement was
negatively correlated with positive oil price shocks, and positively
correlated with negative oil price shocks. Subsequently, the equations of the
models are used to forecast the stock market index movement. This study
uniquely enhances the understanding of bivariate relationships.
Misra, Pooja, 2018 “An Investigation of the Macroeconomic
Factors Affecting the Indian Stock Market “
The economic growth of India has positioned it as one of the rapidly growing
economies the world over and it is expected to be one of the top three economies
globally over the next decade. Contrary to a slowdown in the earnings
of Indian corporates due to excess existing capacity and the inability of banks to
lend, the stock market ie Bombay Stock Exchange has performed well. The
objective of the present research is to investigate the link that exists, if any, between
BSE Sensex and macroeconomic variables such as Index of Industrial Production
(IIP), inflation, the rate of interest, the price of gold, rate of exchange, FII and
supply of money for the period April 1999-March 2017. The study also seeks to
determine the strength of the link between the independent parameters and the
dependent parameter ie BSE Sensex in the short run and long run based on the test
of Johansen Cointegration, Granger Causality, and the Vector Error Correction
mechanism. The analysis through the Vector Error Correction Model (VECM)
confirms that there exists a long-run causality between the macroeconomic
variables of Index of Industrial Production (IIP), inflation, interest rates, gold
prices, exchange rate, foreign institutional investment, money supply and BSE
Sensex. It establishes that there does exist a short run causality between Inflation
and BSE Sensex and Money Supply and BSE Sensex. The results importantly show
that BSE Sensex causes changes in the exchange rate and money supply, FII, gold
prices and IIP.
PROBLEM DEFINITION
The purpose of the project is to analyze the price movement of
stocks in the oil and gas sector and also to provide advisory
services to investors based o price movement prediction.
 OBJECTIVES
PRIMARY OBJECTIVES

1. To analyse performance of companies which are in the oil and natural gas
sector .
2. To evaluate investment opportunities based on fundamental and technical
analysis.
3. To predict the price movement of the companies under the oil and naturl
gas sector for the next three months.
 SCOPE
The study is limited to companies from oil and natural gas
sector and the data obtained from NSE & BSE websites. The
study is mainly based on past data and price prediction with
the help of financial statements and other fundamental and
technical factors.
METHODOLOGY
• Fundamental analysis
a. EIC factors.
b. Financial statements- ratios .
• Technical analysis
a. Charts -line and candle stick chart
b. Indicators- RSI, moving average, stochastic.
THANK YOU