Tag: O2C business

Reliance’s oil to chemical biz revenue slips 18% in Q1 on recession fears, slower demand

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Reliance Industries’ (RIL) oil-to-chemicals (O2C) business saw a 18 percent year-on-year (YoY) dip in revenue to Rs 1.33 lakh crore, primarily due to a sharp fall in fuel cracks from exceptionally high levels in corresponding quarter of last year. The same was Rs 1.61 lakh crore reported in the year-ago quarter. The company with the second-biggest weightage on the Nifty 50 index reported its April to June quarter results on Friday, June 21.

For the O2C segment, the revenue was up 3 percent on a sequential basis.

The demand was impacted by destocking on recessionary fears and high interest rates, as well as slower than expected ramp-up in China markets. Year-on-Year comparisons are skewed due to historic high fuel cracks in 1Q FY23, with dislocation in energy markets, RIL said in a regulatory filing.

During the quarter, consolidated EBITDA or Earnings Before Interest, Taxes, Depreciation, and Amortization came in at Rs 15,271 crore, down 23 percent YoY, and down 6 percent QoQ, in the O2C segment.

‘O2C biz resilient despite global macro headwinds’

“O2C business delivered a resilient performance despite continuing global macro headwinds. Commencement of MJ field operations during the quarter will enhance India’s energy security, with total production from KGD6 block rising to 30 MMSCMD in the coming months,” said Mukesh Ambani, Chairman and Managing Director, Reliance Industries.

Sequentially, throughput marginally came lower at 19.7 MMT. Fuel cracks corrected qaurter-on-quarter and year-on-year, but remain above mid-cycle level with a strong global demand.

Diesel crack average stood at $15.6 per bbl versus $28.6 per bbl in the previous March quarter and 51.6 per bbl in the year-ago period.

Gasoline cracks average at $12.1 per bbl as against $15 per bbl in Q4 of FY23 and 29.8 per bbl in Q1 of FY23. ATF cracks average was at $14 per bbl versus $26.5 per bbl in Q4 of FY23 and 39.2 per bbl in Q1 of FY23.

“It is far better than what expectations were, while we knew that some of the old businesses would be struggling a bit in terms of growth and margins, those margins also aren’t something you would complain about. Singapore GRMs were anyways really down almost 50-55 percent on a quarter-on-quarter basis So that was pencilled in. But in spite of that, the O2C business overall also, if you see thins to petchem, which has been soft traditionally for this quarter, that’s also done pretty well,” said market expert Prakash Diwan.

Meanwhile, the conglomerate’s net profit came in at Rs 16,011 crore, down 11 percent YoY for the three-month period, owing to pressure in its O2C segment. Consolidated revenue declined 5.3 percent YoY to Rs 2.11 lakh crore.

The board has recommended dividend payout of Rs 9 a share, subject to approval of the shareholders.

Reliance Industries shares finished lower by 2.48 percent at Rs 2,555 apiece on NSE, ahead of the Q1 earnings announcement. The stock is trading close to its all-time high and has recovered nearly 30 percent from its March 2023 lows.

Dalal Street investors are now eyeing the company’s upcoming annual general meeting (AGM) scheduled to be held in August.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Reliance Industries Q2 results | Retail and Jio shine — experts weigh in

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Telecom and retail businesses delivered a strong second quarter for Reliance Industries. Jio reported a margin above 50 percent and a revenue growth above 20 percent for the third straight quarter.

Reliance Retail reported a record revenue for the September quarter that also surpassed brokerage estimates. The consumer retail arm of Reliance Industries Ltd reported a revenue of Rs 64,936 crore. On a year-on-year basis, revenue increased 11 percent. Growth in the topline was led by a revival in footfalls, store additions and digital integrations.

Speaking to CNBC-TV18, Abhijeet Bora, Senior Research Analyst at Sharekhanm said, “Definitely, results are good except for the O2C business or the standalone business, which were weaker than expected. But more focus is on the Jio side which has done well — the EBITDA is largely in line.”

He added, “Retail — the growth has been good, beating our estimate. So I think that the focus is more on consumer-centric businesses, which are performing well and the standalone business is largely volatile. But the overall outlook, we think, is positive. Any weakness should be taken as the opportunity to buy this stock as this segment will also stabilize going forward.”

Probal Sen of ICICI Securities said he was disappointed in the results, which he termed a “negative surprise”.

“Maybe the effect of windfall taxes has been a bit higher or the benchmark refining margins themselves have been a bit lower than what we were looking at. Oil and gas being strong is positive. I think retail has definitely surprised on the positive and to that extent that is encouraging,” Sen said.

Deven Choksey of KR Choksey Holdings said consumer-facing businesses are showing a remarkably good amount of resilience. “Good set of numbers from that segment,” he said.

Also Read: Reliance Retail earnings beat driven by revival in footfalls, digital integration

Prakash Diwan of Market Expert said the results seem to reflecting the stress that building on the O2C business. “Interestingly the O2C business, in terms of revenue contribution, is significant — almost like 50 percent of the overall consolidated number. Retail and telecom are yet to kind of become much more weighty in that sense, so you will see that impact. But there is no taking away from the fact that retail has outshone most expectations and it has just the kind of buildup that is starting off or beginning of a big secular trend in terms of the festive season.”

Watch video for more.

Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Reliance quarterly revenue up 5% in line with Street estimates as consumer-facing units shine

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

[wealthdesk shortname=”Reliance” isinid=”INE002A01018″ bseid=”500325″ nseid=”RELIANCE” sector=”Refineries” exchange=”nse”]

Reliance Industries Ltd (RIL) reported consolidated revenue of Rs 2.3 lakh crore for the July-September period, up 5 percent compared with the previous quarter and in line with Street estimates.

The conglomerate’s net profit came in at Rs 13,656 crore for the three-month period, down 23.9 percent sequentially owing to pressure in its oil-to-chemical (O2C) business.

Reliance’s consolidated EBITDA margin — a key measure of profitability — came in at 13.6 percent for the September 2022 quarter, according to a regulatory filing.

Revenue from the company’s oil-to-chemical unit came in at Rs 1.6 lakh crore for the September quarter, as against Rs 1.61 lakh crore for the April-June period. Reliance’s operating margin in the O2C business stood at 6.1 percent.

“The performance of our O2C business reflects subdued demand and a weak margin environment across downstream chemical products. Transportation fuel margins were better than last year but significantly lower sequentially,” said Mukesh D Ambani, Chairman and Managing Director of Reliance Industries.

The O2C business accounted for almost 57 percent of Reliance Industries’ total revenue in the year ended March 2022.

“Segment performance was also impacted by the introduction of special additional excise duties during the quarter to ensure stable supply and lower volatility in the domestic market,” he said. 

Revenue from Reliance’s oil and gas business increased 6.3 percent to Rs 3,853 crore compared with the previous quarter. The operating margin from the unit improved to 65 percent from 58 percent sequentially.

The company reported strong numbers from its consumer-facing businesses — Reliance Retail and Jio Platforms — on the back of robust footfalls and subscriber addition.

Friday’s earnings report is the company’s first since its 45th annual general meeting in June, where the Chairman detailed the succession plan at India’s most valuable firm.

Revenue from Reliance Retail — Reliance Industries’ retail arm — jumped almost 11 percent sequentially to Rs 64,936 crore. Its margin improved by 20 basis points to 6.8 percent for the three months.

The retail arm’s numbers surpassed brokerage estimates. Growth in the topline was led by a revival in footfalls, store additions and digital integrations.

Reliance said the quarter was marked by an operating environment at par with pre-COVID levels. Consumer sentiments remained positive across town classes on the back of key promotional events and an early onset of festivities, the conglomerate said in a statement.

Reliance Jio’s net profit increased 4.2 percent to Rs 4,518 crore for the quarter. The telecom firm’s margin and revenue grew for the third consecutive quarter, while the average revenue per user (ARPU) grew for the sixth consecutive quarter due to a better subscriber mix.

Reliance’s numbers are more or less on expected lines, Deven Choksey of KR Choksey Holdings told CNBC-TV18.

“Fortunately, the Jio and retail numbers are actually more robust compared to the O2C part of the business… Consumer-facing businesses are definitely showing a remarkably good amount of resilience,” he said.

Reliance shares rose 4.3 percent for the week ahead of the earnings announcement, a period in which the benchmark Nifty50 index gained 2.3 percent. The RIL stock was among the top weekly gainers in the Nifty basket.

Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Reliance Industries likely to clock 5% rise in quarterly revenue

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

[wealthdesk shortname=”Reliance” isinid=”INE002A01018″ bseid=”500325″ nseid=”RELIANCE” sector=”Refineries” exchange=”nse”]

Reliance Industries Ltd (RIL) is all set to report its financial results for the July-September period on Friday. Analysts in a CNBC-TV18 poll expect the oil-to-telecom conglomerate to report a 5 percent rise in revenue to Rs 2.3 lakh crore for the July-September period compared with the previous quarter.

The analysts peg the company’s operating margin to come in at 14.02 percent for the three-month period. They estimate its quarterly profit at Rs 15,721 crore.

Investors keenly await Reliance’s quarterly earnings report for domestic cues, as the stock of the country’s largest company by market value has lost 12.6 percent of its value since in recent peak in late April — a period in which the benchmark Nifty50 index has risen 2.7 percent.

However, it has outperformed the market with a rise of 5.7 percent so far this week, as against the Nifty’s gain of 2.7 percent.

Analysts expect weakness in its oil-to-chemical (O2C) unit, which could impact the company’s overall earnings in the three-month period owing to a windfall tax on fuel exports and lower demand.

The O2C business accounted for almost 57 percent of Reliance Industries’ total revenue in the year ended March 2022.

According to Nomura, Reliance’s gross refining margin — or the money earned by refining each barrel of crude oil into fuel products — is likely to decline to $11 per bbl in the September quarter, as against $18 a barrel in the previous three months and $12.8 a barrel in the three months ended March 2022.

Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

No change in RIL valuation outlook on Aramco deal re-evaluation: IIFL

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Reliance Industries Ltd (RIL) on Friday said that it had decided to re-evaluate the deal under which Saudi Aramco was to invest roughly $15 billion in RIL’s oil-to-chemicals (O2C) business. The 20 percent stake sale in the unit was announced in 2019 but was delayed as oil prices and demand crashed last year due to the pandemic.

IIFL’s Harshvardhan Dole said that sentimentally, the development is negative, but it does not change earnings or valuation outlook for the company’s O2C business.

Read Here: Reliance Industries, Saudi Aramco to re-evaluate proposed investment deal in O2C business

Dole said that the state of RIL’s balance sheet was very different now following the series of fund raises over the last one year.

He said when the company had first announced the deal with Aramco in 2019, it had been in need of funds.

Also, the macro picture of the O2C business has improved substantially over the last year following the surge in crude oil prices.

Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

For full interview, watch accompanying video…

Also Read: Reliance Industries, Saudi Aramco to re-evaluate O2C investment proposals: A timeline of events and other major deals

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Reliance Industries, Saudi Aramco to re-evaluate O2C investment proposals: A timeline of events and other major deals

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Reliance Industries Ltd (RIL) said it is withdrawing its application to get necessary approvals to hive off its oil-to-chemicals (O2C) business into a separate unit due to the evolving nature of its business portfolio. The current application with NCLT for segregating the O2C business from RIL is being withdrawn, the company said in an exchange filing on Friday.

The RIL move comes months after the 44th AGM of the conglomerate in June where chairman Mukesh Ambani announced a foray into clean energy with a massive Rs 75,000 crore push spread over three years to build four factories to manufacture solar photovoltaic modules, fuel cells, batteries and electrolysers, for the production of hydrogen. 

RIL’s new energy arm, Reliance New Energy Solar announced in mid-October that it has acquired Norway-based REC Solar Holdings for $771 million and also picked a 40 percent stake in EPC player Sterling and Wilson Solar via a combination of primary investment, secondary share purchases and an open offer of Rs 2,850 crore.

As announced by Ambani at the 44th AGM, the conglomerate is pushing its Rs 75,000 crore clean energy plan with several acquisitions in the space. Meanwhile, the globe consumed 98.9 million barrels per day (bpd) of crude oil in October 2021 as per an EIA short-term energy outlook note, indicating oil demand is nearing its pre-COVID levels of around 100 million bpd, as economies bounced back from the pandemic impact pushing Brent crude oil prices jumped almost 60 percent this year.

Moreover, RIL’s technology arm Jio Platforms has raised investments worth Rs 1,52,056 crore in the company’s technology arm Jio Platforms since its launch from companies such as Google, Facebook, Intel, Qualcomm, PIF, Silver Lake, L Catterton, among others. Investments have come into retail arm Reliance Retail Ventures as well.

Riding on the successful business strategy, RIL’s market capitalisation had hit Rs 18 lakh crore in early October this year, jumping from Rs 5 lakh crore in July 2017. It is the first company in the country to touch this level.

Here’s a timeline of RIL’s major deals and acquisitions:

November 19, 2021: RIL, Saudi Aramco to re-evaluate investment deal with the Kingdom’s firm in Oil-to-Chemcials (O2C) business. RIL to withdraw its application with NCLT for segregating the O2C business.

September 2021: Reliance Strategic Business Ventures Ltd (RSBVL), a wholly-owned subsidiary of RIL, to acquire 2.28 crore equity shares of Strand Life Sciences Pvt. Ltd for a cash consideration of Rs 393 crore. RIL to further invest up to Rs 160 crore, which is expected to be complete by March 2023, it said in a regulatory filing. The total investment will translate into 80.3 percent of equity share capital in Strand on a fully diluted basis.

August 2021: Reliance New Energy Solar Ltd (RNESL), a wholly-owned subsidiary of RIL, along with strategic investors Paulson & Co. Inc. and Bill Gates, and a few other investors, has announced an investment of $144 million in Ambri Inc, an energy storage company based in Massachusetts, USA.

June 2021: The Abu Dhabi National Oil Company (ADNOC) announced on June 29 that it has entered into a strategic partnership with RIL to join a new world-scale chlor-alkali, ethylene dichloride, and polyvinyl chloride (PVC) production facility at TA’ZIZ in Ruwais, Abu Dhabi. Under the terms of the agreement, TA’ZIZ and Reliance will construct an integrated plant, with a capacity to produce 940 thousand tonnes of chlor-alkali, 1.1 million tons of ethylene dichloride, and 360 thousand tons of PVC annually.

June 2021: RIL chairman Mukesh Ambani announced at the 44th AGM the induction of Saudi Aramco as a “strategic partner” in the conglomerate’s O2C business. As part of the pact, Aramco’s Yasir Al-Rumayyan would join the RIL board as an independent director.

February 2021: RIL subsidiary RSBVL acquires an additional equity stake in its investee company skyTran Inc, the company announced on February 28. The additional equity stake were acquired by RSBVL for a consideration of $26.76 million, increasing its shareholding to 54.46 percent on a fully diluted basis, said the statement.

October 2020: Abu Dhabi state fund Mubadala Investment Company will invest Rs 6,247.5 crore to secure 1.4 percent in the retail unit of RIL. Mubadala had earlier announced an investment of $1.2 billion in Jio Platforms as well.

August 2020: Saudi Aramco Chief Executive Amin Nasser has said the company is ‘still working on the deal to invest in Reliance Industries’, Bloomberg reported, clearing the air on the agreement between the two companies.

August 2020: Reliance Retail acquires majority stake in Netmeds (promoted by Vitalic Health and subsidiaries) for Rs 620 crore. RIL also agrees to buy Kishore Biyani’s Future Group’s assets for $3.4 billion. in the month.

July 2020: RIL and BP announce the launch of their joint venture Reliance BP Mobility Limited (RBML). The joint venture will begin selling fuels and lubricants with immediate effect from its existing retail outlets, which will be rebranded to “Jio-bp” in due course.

May 2020: RIL’s digital subsidiary Reliance Jio Platforms gets investments worth Rs 78,562 crore in the last one month from large investors including KKR, Facebook, Silver Lake, Vista and General Atlantic.

April 2020: RIL inks deals with Facebook to invest Rs 43,574 crore in Jio Platforms for almost 10 percent stake.

October 2019: RIL announces the creation of Jio Platforms.

August 2019: At the 42nd AGM, Mukesh Ambani announces plan to sell stake in RIL’s O2C business to Aramco. The deal with Aramco, which entailed a stake sale of 20 percent in the O2C business was expected to be completed by March 2020.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RIL Q2FY22 earnings: Street expects to see O2C business rebound

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Reliance Industries Ltd (RIL) will be reporting Q2FY22 earnings after market hours on Friday. The oil-to-chemical (O2C) Business is expected to see a rebound both on quarter on quarter (QoQ) and on a year on year (YoY) basis.

Singapore gross refining margins (GRMs) have seen a sharp uptick, they have doubled on a QoQ basis to USD 3.7 per barrel due to higher demand and better product cracks and now they are trading somewhere around USD 7 per barrel, so the bullish trend continues.

ALSO READ: RIL consolidated Q2FY22 expectation

Because of this, Nomura expects the refining EBIT to rise to around 53 percent on a sequential basis to Rs 4,600 crore. However, petchem segment which has been strong so far will see some moderation as petchem prices have seen some decline.

At the same time, raw material prices like naphtha and gas prices have seen an increase. That would mean lower spreads.

Nomura expects a 15 percent decline in petchem EBIT quarter-on-quarter.

ALSO READ: Road to future: Reliance expands clean energy portfolio with new deals, partnerships

Overall, EBITDA for the O2C business is expected to come in at Rs 12,693 crore which is a 4 percent sequential growth and 42 percent growth YoY.

Watch the accompanying video of CNBC-TV18’s Sonal Bhutra for more details.

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Catch all market updates here.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Expect RIL to test its previous highs, go to Rs 2,500 zone soon, says Prakash Diwan

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Reliance Industries Ltd’s (RIL) annual report was released on Wednesday. The report shows RIL is well poised with liquidity to drive its digital, retail and O2C businesses. The plan to reorganise its O2C business by end of 2021 and induct investors is also on track. But what stands out against the pandemic backdrop are the significant achievements in developing COVID test kits and drugs, which can also be a new avenue for growth. Market expert Prakash Diwan shared his views.

“The very clear takeaway from the annual report is the clarity of the timeline of the O2C carve out – that’s a phenomenal change, and it was always on the cards. The timeline indicates that it is going to be within the next 6 months,” he said.

“At Rs 1,800-1,900, we were missing out on triggers for Reliance to start participating in the upmove. We have seen the participation and this validates that. So, the annual report very clearly is a reaffirmation of the debt reduction, the O2C carve-out, the kind of value unlocking that could happen,” he added.

“You will see the stock test its previous highs and go to the Rs 2,500 zone very soon,” Diwan reiterated.

According to Diwan, the diagnostic thing could probably make a big difference in terms of getting traction to some of the other businesses. “I think it may not be a standalone vertical, but it will definitely be a very strong secondary support to the existing verticals,” Diwan mentioned.

For the full interview, watch the accompanying video.

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Elixir’s Dipan Mehta: Positive on RIL; prefer PI Industries over UPL

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Dipan Mehta, Director at Elixir Equities is positive on Reliance Industries Ltd (RIL) and said that the oil-to-telecom-to-retail conglomerate will start outperforming the markets.

“This stock will start to outperform the markets. Underlying fundamentals are improving, it benefits from rising crude oil prices and commodity price increases are going to benefit the oil-to-chemical (O2C) business. Positive on RIL and such corrections are good opportunities for investors who are underweight in RIL to get equal weight considering its massive weightage in the Sensex and Nifty.”

Within the agrochemical space, Mehta prefers PI Industries, a more focused business model that benefits from many cycles that are underway, over United Phosphorous Ltd (UPL).

“I would give UPL a pass. Within the agrochemical space, the best pick remains PI Industries. I would go with PI Industries rather than UPL.”

In terms of metal stocks, he said, “I would like to be a bit cautious as far as metals are concerned. You need to buy them when there is distress in the sector not when the sector is booming the way it is.”

The oil marketing companies (OMCs) like Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd (BPCL) and Indian Oil Corporation (IOC) are due for a trading rally.

“Any positive news flow on BPCL privatisation will have beneficial effects on the P/E multiples of IOC and HPCL. These are highly cyclical businesses and they are becoming more like utilities, the end of the day there is hardly any growth as far as OMCs are concerned because of the kind of growth in end product volume. So you could make a trading bet on it but certainly not great long-term portfolio stocks,” Mehta said.

Within non-banking financial companies (NBFCs), Bajaj Finance is a nice stable stock, he said.

“It is a good time to buy midcap stocks and microfinance companies and gold loan companies could outperform the overall NBFC basket,” Mehta added.

For more, watch the video…

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow