Buy GAIL and Power Grid: Amit Goyal

Amit Goyal, Director, Pace Stock Broking Services, in a chat with ET Now talks about Power Grid and GAIL.

Power Grid and GAIL you like both these counters, give us your reasons and your targets on the same?

GAIL is looking like a good buy from a long-term point of view because it has a monopoly position in the gas pipeline and gas transportation sector and some estimates have been made according to which gas demand in India is going to double by 2015 and GAIL being in a unique monopoly position and with a very high return on equity of 20%, it is in a very good position to take advantage of this for the next 4-5 years, so basically this is not just a good long-term bet but even in the current scenario, basically the market is looking a little overstretched on valuations. There is safety in PSU stocks, so we are recommending to our clients to reduce the beta on their portfolios and to go for relatively safer stocks like GAIL and Power Grid.