OMC stocks poised to do well going ahead: IV Subramaniam, Quantum AMC

In a chat with ET Now, IV Subramaniam, MD & CIO, Quantum Advisors, Director, Quantum AMC, shares his views on about the oil marketing companies.

ET Now: What is the sense that you are getting about the oil and gas pack? A lot of positions are riding high in anticipation of a decision on the gas price issue.

IV Subramaniam: It is not just the gas price. It is also a case where subsidies have come down with oil prices being where they are right now. There is also the fact that much of the product pricing now is more or less at a stage where subsidies would be very low.

It is all very good news for the oil companies. Going ahead, they will not have the same kind of problems which they historically had. So, I guess people are comfortable with that situation, and so they have been buying into those stocks.

At Quantum, we have always believed that these stocks are extremely cheap. Their valuations were probably at 50% of their replacement cost when we acquired these companies. Right now, we are comfortable holding on to them. But may be at some point we will trim it a little bit.