OMC is a very iffy sector to look at: Sangeeta Purushottam

In a chat with ET Now, Sangeeta Purushottam, Professional Investor, shares her views on the OMC pack. Excerpts:

ET Now: The one pocket in the market which really cracked hard yesterday was the entire OMC basket. Do you think it has got anything to do with the kind of discount that the IOC divestment is being talked about at?

Sangeeta Purushottam: That is just one of the reasons. The issue with the entire OMC basket really is pricing of the final products and again the road there gets much longer. With the pressure on the rupee, we have not really seen any kind of significant softening in oil prices. In fact, sometimes we have seen a bit of a reverse trend. So a lot of these factors are coming together.

ET Now: Would you be a buyer in OMC stocks because the valuations are looking attractive, diesel prices have been deregulated, eventually these companies will start making money or you are better giving that a skip?

Sangeeta Purushottam: The valuation argument here does not hold. It has been a value trap for a long time. So it becomes a very iffy sector to look at.