Mehraboon Irani, Nirmal Bang Securities believes the diesel price hike announced overnight and the recent gas price hike will be positive for oil marketing companies (OMCs). From the oil and gas space, he likes Reliance Industries and Bharat Petroleum Corporation Ltd.
Also Read: Gas price hike to boost Reliance earnings from FY17: Kotak
From the aviation space, he remains bullish on Jet Airways despite concerns raise by the Prime Minister's Office on the Jet-Etihad deal. He recommends investors to hold the stock.
Below is the verbatim transcript of Mehraboon Irani's interview on CNBC-TV18
Q: How would you approach the oil marketing companies (OMCs) this morning after the diesel price hike that we saw overnight?
A: We have been positive on this space for quite some time. The best news came last week when gas prices were hiked. The performance of these companies cannot deteriorate from here but the point is who benefits.
As far as the diesel price hike is concerned, it is positive for the OMCs. But if one looks at the way things have happened, the way rupee has moved, the subsidy burden has not negated too much, at the end of it all, the government is showing the willingness despite elections just being 12 months away, four state elections just three-four months away. They are showing nerve and the willingness to increase prices which they could send from the reforms front.
This space is worth looking at, we have been positive on this space. We continue to feel that Reliance Industries is a dark horse in this space and in OMCs we like BPCL among the lot.
Q: What do you do with a stock like Jet Airways now?
A: From a trading angle, whatever bad could happen to that stock has already happened. We remain positive that all these things will ultimately go through. We need to look at things in the backdrop of the fact that this country needs foreign capital more than any other point over the last 20 years.
Somewhere all the approvals will go through, everything will happen. The stock, to a large extent, has been moving both ways largely fuelled by news that keeps on this particular thing but if I was an investor, I would continue to remain invested in it.