Now days India is witnessing a strong wave of coronavirus pandemic
& the demand for medical oxygen has surged which has boosted the shares of
the company that produces the gas.Like
Shares of Linde India have jumped 104% since February while those
of Bhagawati Oxygen have climbed 52% and National Oxygen and Gagan Gases have
risen 33% each. India has been grappling to meet the heightened demand for
oxygen for the last few weeks as the COVID-19 infections surge.
Many retail
investors seem to have interpreted this temporary demand scenario for the gas
as an opportunity for stronger returns which not only boosted the gas
suppliers' stocks but also shares of Bombay Oxygen Investments which is an NBFC
firm and has nothing to do with the gas except for its name.Bombay Oxygen stock
have jumped 144% since February due to frenzy-driven trade just because of its
name and not the fundamentals. Its middle name 'Oxygen' suggested to the
investors that the company deals in oxygen supply.Profits are expected to rise
over the next two quarters as demand for oxygen cylinders will there for next
6-9 months. But there are many frontline companies like BPCL, Reliance, Tata
Steel that have started supplying oxygen cylinders to hospitals which may
hinder their
profitability
.
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