Experts said beyond a point the stock performance is psychological. “Most of these stocks were underperformers and were badly hit due to fall in oil prices to $35 level and during the recession period. Now as crude price moves upwards, they are regaining momentum,” said Jagannadham Thunuguntla, head of research at SMC Capitals.

1. Rise in crude price sends offshore stocks soaring
By Vikas Srivastav Apr 07 2010 , Mumbai
As oil prices moved up and steadied around $85 per barrel, offshore companies and shipping
firms with offshore interests have outperformed the Sensex in the past five sessions on the
Bombay Stock Exchange.
For the period from March 30 to April 7, Aban Offshore, Great Offshore, Dolphin Offshore, GE
Shipping, Shipping Corporation of India (SCI) and Varun Shipping have all risen between 3 and
9 per cent, while Essar Shipping and Logistics rose as much as 41 per cent. In comparison, the
broader market index, Sensex, rose just 2.15 per cent during this period.
Aban Offshore rose 6.73 per cent to Rs 1,246.40, while Varun Shipping gained 8.90 per cent to
Rs 53.20. Dolphin rose 4.54 per cent to close at Rs 378.10, GE Shipping around 8 per cent to Rs
318.05, Essar Shipping shot up sharply to close at Rs 97.40.
Experts say rising crude prices is a positive sign for shipping companies with interest in offshore
businesses since oil exploration activities get a leg-up. Deven Choksey, managing director of KR
Choksey, said, “The upward movement in oil price will be revenue positive for shipping
companies, and if the trend continues for the next three months, the companies may be re-rated at
5 times the price to earnings from the present PE multiple of 3,” he said.
Experts said beyond a point the stock performance is psychological. “Most of these stocks were
underperformers and were badly hit due to fall in oil prices to $35 level and during the recession
period. Now as crude price moves upwards, they are regaining momentum,” said Jagannadham
Thunuguntla, head of research at SMC Capitals.
Many shipping companies have renewed their focus on the offshore sector with capital
expenditure plans to buy new fleets to cater to exploration and drilling business. GE Shipping is
even planning to unlock value in one of its subsidiary companies in the offshore space —
Greatship India — to raise funds for its offshore business.
SCI has set aside around $2 billion for the purchase of new vessels, including offshore vessels. It
is expecting deliveries of 23 vessels in the fiscal 2010-11.
Besides, lending to India’s shipping sector appears to be recovering quicker than elsewhere as it
is one of the few markets that are not over-saturated and lenders recognise the potential for
growth over the next few years, another Mumbai-based analyst said on the condition of
anonymity