Buy OMCs, BPCL top pick: Macquarie Group

Jal Irani, Managing Director, Oil & Gas Research of Macquarie Group told CNBC-TV18, "It is an extremely good time to be putting money into oil marketing companies. We are highly recommending the same. These stocks have fallen roughly about 40 percent within three months which is a significant drop. These stocks tend to be very volatile and these are the opportunities when you make a lot of money on these stocks when they fall like this.”

“If we take a step back, year to date the government has been reforming the sector significantly which is partially gone unnoticed by the market but in my opinion the government doesn’t need to do a lot more. It is just to reverse the current negative sentiment, they need this price hike and that will adequate to revive the stock prices,” he adds.
“If we look at these stocks from value perspective, they are ridiculously cheap and if you strip out the value of the investments of these companies, for example Bharat Petroleum Corporation's (BPCL) USD 2.5 billion overseas upstream investments is completely free. So, at these values if one wouldn’t be buying moreover it is worth noting especially from BPCL which is our top pick, the overseas upstream investments, the oil and gas investments are dollar based business. So, in fact rupee depreciation benefits BPCL in a very significant way and to the contrary the stock should have been going up. So, undoubtedly we are pushing these stocks harder and BPCL is our top pick."