RIL, IOC to Asian Paints: Which stocks to buy as crude oil prices crash nearly 20% YTD?

Stocks to buy: Crude oil prices have been on a slippery slope for most of 2025, shedding almost 20% on a year-to-date (YTD) basis, with Brent crude prices briefly slipping below the $60/barrel mark on Monday.
While the crude oil prices rebounded to $61 level today, May 6, they have tumbled almost 10% over the past six sessions alone. This fall in oil prices come amid two factors: rising OPEC supply amid weak demand and US-China trade war.
Crude oil prices in international market declined by more than 18% in April due to continues rise in production by key oil producing nations like OPEC cartel and trade disputes globally which hampered oil demand, said Vishnu Kant Upadhyay, AVP - Research & Advisory, Master Capital Services.
On Saturday, OPEC+ agreed to further speed up oil production hikes for a second consecutive month, raising output in June by 411,000 barrels per day (bpd). The June increase by eight participants in the OPEC+ group, which includes allies like Russia, will take the total combined hikes for April, May and June to 960,000 bpd.
That represents a 44% unwinding of the 2.2 million bpd of various cuts agreed on since 2022, according to Reuters calculations.
Against this backdrop, ING and Barclays also lowered their Brent crude forecasts. While Barclays reduced its Brent forecast by $4 to $66 a barrel for 2025 and by $2 to $60 for 2026, ING expects Brent to average $65 this year, down from $70 previously, as per a Reuters report.
While falling crude prices have put commodity traders in a fix, it could act as tailwind for the slowing Indian economy and also boost the domestic stock market.
Explaining the impact of falling crude prices on the Indian economy, Ross Maxwell, Global Strategy Operations Lead, VT Markets, said India is one of the world's largest importers of crude oil, importing more than 80% of its crude oil needs.
When crude oil prices come under pressure, it generally means good news for India, as it reduces India's import bill and can support the rupee which will help encourage foreign investment, he said.
The falling crude prices also help reduce inflation as it lowers the cost of fuel and transport costs across a variety of sectors in the Indian economy, driving up profit margins for sectors that rely heavily on crude oil and helping earnings, Maxwell added.
Not just the economy, falling crude prices also spell good news for the Indian stock market. Analysts believe the already rising stock market (up 10% since March 2025) could gain from falling crude prices, although it cannot be the only factor driving gains.
Crude oil prices falling is a positive development for the Indian equity markets, as India imports over 80% of its crude oil requirements, said Kunal Kamble, Sr. Technical Research Analyst at Bonanza Group. Cheaper oil translates into lower transportation and manufacturing costs, which helps ease CPI inflation. This, in turn, provides room for the Reserve Bank of India (RBI) to consider rate cuts or maintain a dovish policy stance, he explained.
Upadhyay of Master Capital Services, believes that the positive effects of the falling crude prices could strengthen the case for further gains in Indian equity market that should be containing around 24,800-25,000.
However, Aamar Singh Deo, Sr VP Research Angel One, said the rally in Indian equities cannot be just factored on fall in crude oil prices. FIIs have come back strongly in markets and have continued their buying spree along with some positive talks going on between US and China on trade talks has led to market sentiment turning positive, he added.
The sectors which are likely to gain from falling crude prices are those that rely heavily on oil. These include aviation, automotive, paints, oil marketing companies and refineries and FMCG. Here's what analysts recommend buying: Sumit Pokharna, VP-Fundamental Research, Kotak Securities, is bullish on Reliance Industries. RIL processes crude oil and sells finished products domestically and also exports them. Lower crude oil prices are positive for refiners, he said. "We believe long-term investors can buy RIL. We are positive on RIL and believe there are multiple triggers for the company to grow," Pokharan said.
Aamar Deo Singh, Sr VP-Research at Angel One, said falling oil prices help in easing inflation, which helps in bringing down transport and production expenses. "Many industries benefit in such times, such as plastics, adhesives, oil-based paints and dyes, are set to go down as input costs plummet for these companies, leading to higher operating margins for these industries. Also, oil market companies benefit from this decline. In the paint space, Berger Paints looks good. In the adhesive space, Pidilite can be looked at, and in the CV space, Ashok Leyland looks fine," said Singh.
Vishnu Kant Upadhyay, AVP - Research & Advisory, Master Capital Services, said he would recommend focusing on Indian Oil Corporation as prices are making a base formation with regaining their all key moving averages. "With the combination of technical & fundamental factors, prices are looking to pave the way for 160, 162 in the near to medium term," he said.
Kunal Kamble, Sr. Technical Research Analyst at Bonanza Group, recommended buying IGL and Asian Paints. "IGL is showing strong technical strength. The stock has given a breakout from a falling wedge pattern on the daily chart, accompanied by rising volumes—a sign of growing investor interest. Price is trading above the 50-day EMA, and the RSI is trending higher, all of which support the ongoing positive price action," Kamble said. He added that Asian Paints is another stock showing potential. "While it is currently consolidating in a lower range, the setup indicates readiness for an upside move. The stock remains well-positioned for an uptrend as long as it sustains above ₹ 2,290," Kamble added.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
First Published: 6 May 2025, 03:14 PM IST

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Hindustan Times

9 minutes ago

• Hindustan Times

India's watchdog warns Air India for breaching pilots' flight duty timings

By Aditya Kalra India's watchdog warns Air India for breaching pilots' flight duty timings NEW DELHI, - India's aviation watchdog has issued a warning to Air India for "repeated and serious violations" related to pilot duty scheduling and oversight, according to government directives reviewed by Reuters on Saturday. The Directorate General of Civil Aviation directed Air India to remove three company executives from crew scheduling roles - a divisional vice president, a chief manager of crew scheduling and one planning executive - for lapses linked to flights from Bengaluru to London on May 16 and May 17 that exceeded the stipulated pilot flight time limit of 10 hours. The June 20 order cited "systemic failures in scheduling protocol and oversights" and criticised the lack of strict disciplinary measures against responsible officials. The latest action by the aviation authority against the airline is unrelated to this month's crash of an Air India Boeing 787-8 plane that killed all but one of the 242 people onboard but signal heightened scrutiny of the airline. On Thursday, Reuters reported the authorities had also warned Air India for breaching safety rules after three of its Airbus planes flew despite being overdue for checks on emergency equipment of escape slides. The latest order by assistant director of operations at the DGCA, Himanshu Srivastava, said: "Of particular concern is the absence of strict disciplinary measures against key officials directly responsible." In a statement to Reuters, Air India said it has implemented the DGCA order and in the interim, the company's chief operations officer will provide direct oversight to the Integrated Operations Control Centre. "Air India is committed to ensuring that there is total adherence to safety protocols and standard practices," it added. The DGCA stated in its order that Air India had voluntarily disclosed the violations. Air India was taken over by the Tata Group in 2022 and faces many challenges in its attempts to rebuild its image, after years of criticism from travelers for poor service. The Indian regulator, like many abroad, often fines airlines for compliance lapses. India's government in February told parliament that authorities had warned or fined airlines in 23 instances for safety violations last year. Around half of them - 12 - involved Air India and Air India Express. The biggest fine was $127,000 on Air India for "insufficient oxygen on board" during some international flights. This article was generated from an automated news agency feed without modifications to text.

Mint

15 minutes ago

• Mint

Investors tip to Indian manufacturers: adopt tech and become Silicon Valley for global funds

Singapore, Jun 21 (PTI) Given the government's generous incentives, the Indian manufacturing sector should adopt technology to become a "Silicon Valley" that attracts global sovereign funds, said Bengaluru-based industrialist-turned-investor Ankit Kedia. "Eventually, we should build Indian manufacturing startups that expand abroad as part of our future plans, as we want to make products for the world with a home-grown Silicon Valley-type ecosystem," Kedia said in an interview to PTI at the Super AI conference and exhibition held June 18–19 here. However, technology must be made affordable for these cash-strapped manufacturers operating in lower-cost environments in Tier-II and Tier-III cities, he said. Bengaluru, already recognised as a technology hub and often called India's Silicon Valley, should now focus on manufacturing, especially by leveraging advanced technologies such as artificial intelligence, he suggested. Kedia, who is currently working on a ₹ 400-crore Fund-2 under his five-year-old Capital-A, shared his vision for the Indian manufacturing sector over the next 15 years, aiming for a strong foundation across the country, starting with low-cost factories in Tier-II and Tier-III cities. With two decades of experience in various industries and five years of running Capital-A Fund-1, Kedia is focused on technologies for the manufacturing sector, which he wants to combine with his long-term investment horizon of 15 to 20 years. Kedia has explored opportunities for the use of AI in manufacturing at the Super AI show, stating that he is returning home to raise ₹ 400 crore for Fund-2, which will be strategically invested in factories in Tier-II and Tier-III cities such as Amritsar, Pune, Ahmedabad. "We want hardware producers in these cities to form the foundation of our future manufacturing ecosystem and to share prosperity across the country," he said. "India's large consumer market, along with the government's Production Linked Incentive (PLI) schemes, provides further confidence to investors to support small and medium-sized software or hardware manufacturers, who will have a low-cost advantage when competing globally,' he emphasized. Kedia also sees international sovereign funds moving to India for better returns on investment, especially as they face pressure from global uncertainties. Capital-A Fund-1 has reported an Internal Rate of Return (IRR) of 28 per cent and is being tracked at 1.8X, Kedia said. "Such fund returns are becoming more and more attractive to sovereign funds in Europe and the United States," said the fund manager, who invested ₹ 120 crore under Fund-1 across 25 investments five years ago. "The strong domestic market, the stability of the Indian ecosystem, and the potential of leveraging an increasing number of free trade agreements (FTAs) between India and international markets are all plus points for our manufacturing sector," he underscored. Harshul Arora, founder and CEO of Noida-based Macgence, noted that more and more enterprises are shifting to AI-automation to be more cost-effective and capture a bigger share of the market through efficient production. "Small manufacturers in Tier-II and -III city regions are able to use AI to communicate with their clients – a real time translation is offered to these small manufacturers to communicate in any language with clients. "This will increase their communication skills and reach to global businesses as well as a large audience," said the 24-year-old who started with a language solutions company and now runs training data solutions for AI companies globally. Over 7,000 participants from more than 100 countries attended the Singapore Super AI.

First Post

31 minutes ago

• First Post

Victory for Trump in US Supreme Court, his tariffs allowed to stay amid legal challenges over trade powers

The US Supreme Court refused to fast-track lawsuits challenging Trump's tariffs, allowing them to remain in effect for now. The court said that it will wait for the appeal court's order read more US President Donald Trump delivered remarks on tariffs, in the Rose Garden at the White House in Washington. A federal appeals court reinstated the most sweeping of President Donald Trump's tariffs. File image/Reuters The US Supreme Court handed President Donald Trump a major legal victory after it refused to put a challenge to his sweeping reciprocal tariffs on the fast track. On Friday, the Supreme Court justices rejected a scheduling request from two family-owned businesses seeking to invalidate many of Trump's import taxes . The rejection means that the Trump administration would have the normal 30 days to file a response to the case. The Tuesday court filing stated that the companies involved in the case were seeking a quick response from the Trump administration, a request which has now been rejected by the country's apex court. STORY CONTINUES BELOW THIS AD According to Bloomberg, the two family-owned businesses wanted the court to take the unusual step of considering the case without waiting for a federal appeals court to rule on the matter. Meanwhile, the Trump administration argued that the Supreme Court should let the normal appellate process play out. Trump's tariff went to the Supreme Court for the first time It is pertinent to note that this is the first time the challenge to Trump's reciprocal tariffs came to the US Supreme Court. As of now, the legal cases over tariffs are limited to district and federal courts. Meanwhile, a federal district judge agreed with educational toy makers Learning Resources Inc. and Hand2Mind Inc., the two companies involved in the Supreme Court case, that the POTUS lacked the authority under the 1977 International Emergency Economic Powers Act to issue sweeping reciprocal tariffs. In a separate case, a federal appeals court ruled that the tariffs could stay in effect at least until that panel hears arguments on July 31. Both courts are dealing with Trump's April 2 'Liberation Day' tariffs, which combine a universal baseline levy of 10 per cent with potentially higher rates for various trading partners. It is pertinent to note that each of these suits also concerns at least some of Trump's separate import taxes over fentanyl trafficking. The case that went to the Supreme Court is titled 'Learning Resources v. Trump'.