Good days ahead for oil marketing companies: Madhusudan Sarda

In a chat with ET Now, Madhusudan Sarda, Managing Partner, Vallum Capital Advisors Private Ltd, talks what lies ahead for oil marketing companies (OMCs).

ET Now: What are your views on OMCs? The oil and gas sector has come out with mixed set of numbers. What have you made of these numbers?

Madhusudan Sarda: As far as OMCs are concerned, they will continue to do quite well within the energy pack. There are very positive structural advantages that they have got in into.

The major factor helping them is the relief from the subsidies front. The government has come out with diesel and LPG reforms, which is significantly ahead of what markets were expecting.

Now, the government is also talking about kerosene reforms. Once these reforms are in place, oil marketing companies should actually reflect the value of their franchise — which is as strong as any other retail plays where the valuations are substantially high. The numbers were not reflecting it because of the subsidy issue.