The analysts expect the oil prices to further harden to around $30 per barrel on back of higher demand as the winter approaches. With the inventories reported to be low, the prices are expected to rise. ONGC's sales realisation is directly linked to the crude oil price. ONGC receives 77.5 per cent of the international parity price which is related to the weighted average price at which IOC contracts its crude. Thus, any rise in international price adds to the bottom line of the company.

International crude prices have been on the uptrend since June 1999 following OPEC's decision to cut production by two million tonnes. Prices hit an all-time low of about $10-11 a barrel early 1999 when ONGC was given a floor price of Rs 1991 per tonne. With the prices moving up to $24 a barrel, ONGC, on a rough estimate, should be getting around Rs 2,480 per tonne. Another redeeming factor is the economical revival of the southeast asian countries. The fresh demand has helped push the oil prices up.

ONGC reported a net profit of Rs 1,507.74 crore for the first six months of the current fiscal. Analysts expect the company to report a net profit of Rs 1,950-2,000 crore for the second half. At current levels, the stock is a very attractive bet.

United Breweries & McDowell's
With UB group all set to go in for international acquisitions for increasing its brand portfolio and diversifying its manufacturing base, stocks of United Breweries Ltd and its subsidiary McDowell's should witness speculative interest. Both the stocks are currently languishing after a sharp decline from their recent highs. McDowell's currently changing hands at Rs 146.3, it touched a high of Rs 221 on October 14. UB Ltd is trading at Rs 127.45 at a P/E of 38.62 times. In the initial stage of its international forays, the group will focus on the sub-continent by planning joint ventures in Bangladesh and Sri Lanka. UB is also planning to acquire a distilling capacity in Bangladesh.

It is reportedly looking at a UK scotch brand and manufacturing facility for the purpose. The group has already set up McDowell Scotland UK, a 100 per cent subsidiary of UB International, for the purpose. The group is also in negotiations with three international Vodka majors in the US, Germany and Russia for a licensing agreement to launch their brands in India. The company is also planning to upgrade its products and is coming up with several new launches in the niche wine segment. The company proposes to launch lichi, mango and peach flavoured wines in the near future.

The group's wine range will be launched through a collaboration with Italian wine manufacturer, Cora Wines. It may also be recalled that McDowell's had proposed to take over three key brands of Shaw Wallace namely Royal Challenge, Director's Special and Haywards. The case is expected to come up in the Calcutta High Court on December 14. Any favourable outcome of the suit could send these stocks in the bull orbit. With the companies also planning to list overseas to finance their international expansions, the stocks could be in demand.