30-40% upside in ONGC and IOC: Hemang Jani, Sharekhan

In a chat with ET Now, Hemang Jani, Senior Vice President, Sharekhan talks about the outlook of oil & gas sector and valuations of ONGC and IOC, in particular.

Crude is moving up. Do you see a big breakout coming in Indian Oil and ONGC because now we are starting to look at their reserves?

Absolutely, given the stand the government has taken on the oil reforms particularly petrol prices have been deregulated, gas prices are also likely to move up and the entire uncertainty on the subsidy component to some extent has gone away. So there is a case for re-rating of the entire sector and coupled with the fact that if you see the crude prices also stabilizing at a slightly higher level we think that companies like ONGC and even IOC could actually come in for some kind of a re-rating and we think that the valuations for both the companies are looking quite attractive so there is a case for a 30%-40% kind of an upside in both the stocks.