Stay away from aviation

CNBC-TV18s Executive Editor, Udayan Mukherjee –

You need to be very careful about how you play anything, which is got to do with oil like - I would stay completely away from aviation. I know stocks have fallen quite a bit and is tempting for a lot of people to say - I am getting many of these aviation stocks at a fraction of their prices earlier. I wouldn’t still go into these kinds of sectors at all because of what’s going on the grounds, so very cautious on aviation.
 
Commercial vehicles is a space where you need to be probably a bit wary about. I know there has been some recovery in the monthly numbers but if oil prices go up and diesel prices go up given the kind of slowdown you are seeing already on the ground. If fuel prices rise further you need to be careful about or at least sentimentally, commercial vehicles stocks might find it very difficult to outperform in this kind of an environment.
 
For oil-marketing companies, I think if there are rallies around the oil-price hike if it can be pushed through it would be an excellent opportunities to switch out of that space because that is not going to go anywhere with the kind of government, elections and political situation, which we have right now. Oil exploration has been a fairly leading sector in the market. My sense is as we have discussed about 10-days back on Cairn India tactically that would have been a good point to probably underweight yourself in oil exploration and wait for a reaction in crude.
 
There has not been a big reaction in crude but there has been some reaction in the upstream companies and the oil exploration stocks. If crude does cool down to USD 110-115/bbl which is not inconceivable in this run, then you will see more damage in the oil exploration stocks which had fallen. But I think converse to what you are doing in oil-marketing companies, serious cracks in oil exploration might be a good opportunity to get. So start looking at getting into that sector because longer-term that is a space you want to be in.
 
So different stocks for different folks, out of aviation, cautious on commercial vehicles, ride an opportunity in marketing to reduce and probably use sharp cracks in oil exploration to accumulate would be probably my sense of, could be wrong, how you should be approaching these oil sensitives.