One should approach OMCs' stocks with caution: P Phani Sekhar, Angel Broking

P Phani Sekhar, Fund Manager-PMS, Angel Broking, in a chat with ET Now, gives his views on OMCs


What is your call on OMCs?

The kind of concessions that the government has given these companies apart from allowing them to raise prices, customs duty has been cut, excise has been cut, these concessions if you remember have come after a long time and these are meaningful concessions. Near term everything is good. Obviously if oil stays at these levels or oil falls I do not think these oil companies are going to cut prices so to that extent they will make money if oil stays at these levels or it falls but if oil rises I do no think the government is going to come to the rescue anytime in the next six months or so. So with that caveat I think that one should be approaching these OMCs with a little bit of a caution and trepidation. If you already have them then hold it but I do not recommend buying OMCs at this point in time. I think upstream makes a much better case for investment than OMCs at these levels.