ONGC appreciation depends on the subsidy level it has to bear: Anish Damania

In a chat with ET Now, Anish Damania, Head-Institutional Equities, IDFC Securities, shares his views on ONGC.

ET Now: You have been bullish on ONGC and you have been dead right ONGC on Friday appreciated by about 11% plus. At 400 plus do you think in the short term is ONGC priced to perfection. Most of the brokerages are now focusing on FY16. FY15 is not over and FY16 and FY17 estimates are floating around?

Anish Damania: Yes, so our analysts have said that the blue sky scenario for ONGC looks like price of 530 but what I would have a word of caution here. May be there is some more room left in this momentum game but if I were to look at it large portion of the increase in the prices over the last few days is because of the expectation of a gas price increase. Now, one is not very sure how the mechanism of the gas price increase would be, also there have been concerns which have been there with respect to the user industries like the fertiliser and the power industry which have kind of said that at those prices it would be unviable to make power. So I would expect that some kind of subsidies would come through and how much portion of those subsidies will ONGC have to bear or the government owned oil PSUs will have to bear that remains to be seen. So if that were to happen then you might have a momentary break on the stock price appreciation which we have been seeing so far.