Good time to look at BPCL: Emkay Global Financial Services

In a chat with ET Now, Anish Damania, Head-Institutional Equity, Emkay Global Financial Services Ltd, shares his views on oil marketing stocks.

ET Now: How would you think of an investment or a trade decision here on oil marketing companies?

Anish Damania: If you look at these two stocks in particular, HPCL and BPCL they have been driven more by news flow in terms of a trading range but what I see is that if at all an institutional investor has to get into this stock he has to get sufficient comfort on the valuations, which are somewhere at about 0.7 times-0.6 times price to book. If it comes somewhere there then we are always going to see some bouts of diesel price increases coming through the year at any given point of time. When we see this all these stocks start spurting up 10%-15% or so that is the time when you get your exits in these stocks. BPCL also has this additional trigger or rather a cushion of its oil exploration outside India and that is what probably is in good set for the stock. The stock has corrected significantly over the last one or two months and probably this is also a good time to look at BPCL as well as the oil story stays intact.