Hold on to OMCs until market moves are clear: Prateek Agarwal, Bharti AXA Invest Mngr

Prateek Agarwal, Head Equities, Bharti AXA Invest Manager advises on the O&G space, in a chat with ET Now.

What is your view post the price or the partial price deregulation in the oil and gas space? Is it time to accumulate these stocks or have you already been doing that in anticipation of this decision?

Prateek Agarwal: We have been holding some oil marketing and upstream oil stocks over this while. This decision changes the pitch quite clearly. While on the downstream and upstream we do not know as to what would be the ultimate contours of subsidy sharing, there is still a loss which will be incurred on account of products like LPG, kerosene etc. But still overall this stress has gone down. This is not scientific, but if you look at how stocks behaved in 2002 kind of a period when this event had first taken place, the moves are very similar and so has been the stock price performance.

Secondly, the downstream still remains in stress. They will still have to bear some amount of loss. The fact of the matter is if you are anti-commodities, then the downstream oil businesses are anti-commodity business in some sense. May be, for example, if crude moves down the trend in retail fuel prices may just lag by a few months, in that sense they may end up making more than what they started with.