Pick oil exploration companies for long term: Phani Sekhar

Phani Sekhar, Fund Manager-PMS at Angel Broking told CNBC-TV18, "The chances of oil falling another 20-25 percent from these levels is little low and at the same time do not expect dramatic recovery. So by the end of 2015 expect oil to be somewhere between USD 65-80 per bbl and in such a scenario oil exploration from a very long-term perspective might be a good idea because it has corrected a whole lot."

He further added, "Oil marketing companies while it is true that they benefit because of lower oil prices, have already run up a lot as oil decline from above USD 100 to USD 60 per bbl, where it is today. More importantly oil marketing companies also have refining capacities which will not do so well when oil comes down and some of the oil marketing companies like Bharat Petroleum Corporation (BPCL) also have oil exploration investments. So, on the balance if the investor is a long-term investor, looking at three year kind of investment horizon then oil exploration is the space but if one is looking at less than one year or so then oil marketing companies might also be a good idea on declines."

"Paint companies are cheap, while Asian Paints might be trading at 32 times; it is purely a matter of conjecture whether it goes to 36 times or 30 times. At such elevated valuations, any incremental upside both in terms of margins and earnings are difficult to map in terms of what kind of re-rating it can lead to in valuations, so I would restrict myself to oil plays rather than going to oil beneficiaries," he said.