JP Morgan upgrades Essar Oil stock

JP Morgan has upgraded Essar Oil to “Overweight” from “Neutral” with a price target of Rs 160 on the back of the Indian firm’s ability to process tougher crudes and optimise its product slate. The U.S. investment bank expects Essar Oil’s earnings per share to grow 58 per cent over the next three fiscal years. “With global diesel demand remaining robust,complex refiners with a diesel tilt would benefit from higher diesel spreads and widening light-heavy differentials,” it said in a note. The company’s refinery expansion is expected to be complete by FY12,significantly raising its ability to process tougher crude,it said. “Higher complexity will also allow the company to take advantage of wider light-heavy crude differentials,” JP Morgan said. At 11.44 a.m.,shares of the company were up 0.39 per cent at Rs 127.40.