panch-tattva talk…oil and gas sector

Friends,

Oil and Gas sector has the PE at 9.5 as of now against 5.5 in 2000. This higher discounting has seen its share in the total market capitalisation rise up to 3.8% now as against 2.2% in 2000 , roughly in the same proportion as PE changed. This thing makes it clear that the this sector is without any manipulation and is fairly priced in line with the expectations at the moment and with market in general. You may remain invested in this sector and expect to be rewarded. The real change in fortunes for the companies in this sector would come with the bold step of govt. in doing away with subsidies and control over prices. In fact the govt. is doing no good to anybody by keeping its hand planted in the oil pie , this has only resulted in mixing of kerosene with petrol/deisel and it has seen a thriving black market in domestic cooking gas. As always, why the govt. would want to loose control unless some foreign power group puts pressure before coming here with grand designs. After all did we not see the excise duty on cars slashed to a point where it is hurting the environment, congesting road and all and lacked maching effort at developing mass transportation . The foreign car makers  prevailed for this to be able to make profits out of Indian markets , while the earstwhile Indian car manufacturers were never allowed to grow , develop products and sell at reasonable prices. Any way , we have to prosper and keep a govt. whatever the level of efficiency.

HariOm,

krsnaKhandelwal