Metals and mining companies will now have to operate more efficiently to generate profits: Pramod Gubbi

In a chat with ET Now, Pramod Gubbi, vice-president for institutional equities, Ambit Capital, shares his view on metals and mining sector.

ET Now: Let us talk about metals and mining names such as Coal India and JSPL. A total of nine coal blocks maybe re-examined now. We have also heard comments from the coal secretary. What is your sense on how does one approach some of these metal mining companies because of this bit of cloud that has come in over the mine wins as well?

Pramod Gubbi: What is becoming clear is that government is in no mood to give away natural resources to profit-making private sector companies, at sub-market prices . This is fair. I must say it from all perspectives.

To that extent, the market needs to be sensible enough to understand that there are no freebees being given away by this government. It is heartening from for a long term perspective that the government is able to price these blocks efficiently. At the same time, pricing input would force some of these companies to build more efficiency in their own operations to be able to generate profits .Therefore, whatever is happening is right from a long-term perspective.