Avoid oil & gas sector, says Dipan Mehta

Dipan Mehta, Member at BSE & NSE told CNBC-TV18, "The street is pricing in very good numbers from the oil marketing companies and disappointment as far as the upstream companies are concerned, that being Oil and Natural Gas Corporation (ONGC). For right reasons oil prices have corrected significantly and the winners and losers are known to all but then if one goes forward two-three years down the line, I don’t see that many great prospects for the oil marketing companies. They are going to face intense competition from new players or existing players who are restarting their petrol pumps, like Reliance Industries or Essar Oil for that matter.""The benefit of subsidy has more or less got priced in, these companies have not made any major investments upstream or downstream over the past several years because of the kind of constraints that they were operating under. So, I don’t see them, after the results for this quarter, may be next two-three quarters will be good but thereafter base effect will catch up and we don’t see them really delivering in growth going forward. So, I would like to avoid the sector as a whole," he said.Disclosure: Analyst has investments in SBI, in midcap pharma companies a whole host of them analyst as well as his clients are invested in many counters.Disclosure: Reliance Industries has acquired management control of Network18, which owns TV18 Broadcast and moneycontrol.com