Deutsche Equities overweight on oil and gas sector

Abhay Laijawala, head of research, Deutsche Equities India has raised the oil and gas sector as an overweight.

Laijawala told CNBC-TV18, “Change in fuel price is a positive move. Infact, we believe that this is by far the boldest piece of economic reform. This is something that investors, the markets, were all clamoring for and against all skepticism the government has delivered. So, we see that the government is beginning to accept the Kelkar Committee recommendations. Infact, yesterday’s decision has therefore raised expectations that there could be more to come in-line with the Kelkar Committee recommendations.”
 
Lajjawala added, “Effectively, we would like to give the government the benefit of doubt, because we think that all the decisions that are coming out of Delhi are going to be far more pragmatic than what we have seen over the last couple of years. Therefore, with that overriding view, we believe that the surprises are likely to be positive. I agree that the market is likely to take cognizance of the positivity only in the next couple of months once you see a series of price hikes.”
“Clearly, therefore, we think that under-recoveries are likely to come off and the sector will continue to react to many of these statements. So, our oil and gas analyst Harshad Katkar is extremely confident. Infact on the back of that confidence, we have raised the oil and gas sector as an overweight. It is the first time we have had that sector as an overweight in our model portfolio.