Reliance & OMCs good buy at this point of time: Ambareesh Baliga

In a chat with ET Now, Ambareesh Baliga, Managing Partner-Global Wealth Management, Edelweiss Financial Services shares his views on the energy sector, especially the oil and gas space.

ET Now: What is your call on the oil and energy space?

Ambareesh Baliga: We have been slightly positive on the oil marketing companies, looking at the way the oil prices have been moving after the Syria issue. The oil prices are correcting which is positive for the oil marketing companies.

At the same time, the rupee also has appreciated decently from those levels which we saw about three weeks back. When the markets rallied, these stocks have not rallied as much. So, there is still a decent upside here.

Although we may not see a major hike of Rs 5 in diesel prices over the next few months looking at the elections on the anvil, but surely will have that 50 paise baby steps every month. To a certain extent even that has not been captured in the stock prices of HPCL, BPCL or IOC.

At these levels, one can take that chance of buying stocks like HPCL and BPCL because the downside is limited whereas you have that headroom of at least another 10% to 12% from here.

ET Now: What is your call on Reliance and OMCs in general?

Ambareesh Baliga: We have been positive on OMCs. Even at these levels, one should go ahead and buy OMCs with hardly any downside. With the gas price hike happening, Reliance also is a good buy at this point of time. The downside for Reliance is not more than Rs 25-Rs 30 more from here. We have a target of about 1125-1150 levels for the next 12 to 15 months. At these levels, one can look at buying Reliance.

ET Now: What is your call on BHEL at 144 levels?

Ambareesh Baliga: We have had an extremely good move from those lower levels of closer to about 105-110. From there, we have seen an extremely good move to closer to 150 levels. I do not see that stock moving too much beyond these levels because we do not have that investment cycle taking off for the foreseeable two quarters. It does not make sense buying into BHEL at this point of time after seeing extremely good rally.