Accumulate HPCL on dips: Ambit Capital

Mukherjea told CNBC-TV18, "There is couple of reasons for buying a decent OMC such as HPCL. If you look at them on a price to book basis they are at around 0.7 times book value. That’s pretty close to their cyclical lows. It is difficult to envisage OMC falling 5-10% below 0.7 times book value. And if obviously hike in diesel price comes through, HPCL is the biggest beneficiary of that amongst the OMCs. So buying HPCL at this juncture is something that could make sense."

He further added, "Your downside is caped by valuation at 0.7 times book and if the hike comes through, something like a 1.1-1.2 times book value for an OMC like HPCL is not inconceivable. So I would use this weakness to accumulate at least one decent OMC in my portfolio given the eminence of diesel price hikes."