OMCs space is sensitive and vulnerable to policy changes: Nirmal Jain, IIFL

In a chat with ET Now, Nirmal Jain, Chairman, IIFL, shares his views on the current outlook of OMCs sector. Excerpts:

ET Now: The rupee appreciation as well as crude fall benefit OMCs. What do you think is going to be the OMC trade from short term investment perspective?

Nirmal Jain: One should wait because this sector has always deceived in terms of clarity and visibility of earnings and predictability because the government is a big player.

Thus, if you look at the under-recoveries in diesel, they are very significant, Rs 11-12 or more than that. Those kinds of recoveries will take a while to recover and the subsidy burden has really gone up so much that this small relief will probably not be enough. Hence, I would say that this is the sector which is so sensitive and so vulnerable to policy changes that I would rather wait till elections to have clarity on what the new government is thinking about this.