Q2FY15 was marked by a sharp drop in global crude prices, weaker refining margins and benign spot LNG prices, according to Religare Institutional Research.

''U/Rs on diesel reduced by 67% in Q2 to an avg. of Rs 1.45/ltr, reducing gross U/Rs to Rs 208 billion and reinforcing our confidence on a lower upstream subsidy burden (at USD 45/bbl) - which in turn would boost net realisations. Gas utilities could also report a sequentially stronger Q2. Top picks- ONGC, GAIL and HPCL,'' said Religare.

''We expect upstream PSUs (ONGC/OINL) to report a stronger Q2FY15 led by better crude realisations. We base our expectations on 40% QoQ lower U/Rs in Q2 at Rs 208 billion and lower gross crude prices, making it imperative for GoI to reduce the per barrel subsidy burden; our estimate for Q2 stands at USD 45/bbl (Q1FY15: USD 56/bbl), and impending ONGC OFS,'' it added.

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