Varun Goel of Motilal Oswal told CNBC-TV18, "We are extremely positive on oil & gas companies, especially in the downstream space. Overall, if you look at the volume growth in the retailing segment for both petroleum and diesel, it has been extremely robust for the last 2-3 months, we are seeing numbers upwards of 10 percent as far as volume growth is concerned. If you look at refining margins considering the fact that the demand for auto fuel has been growing in this part of the world very strongly in the last several months. The refining margins have also been on the uptick."
"So, as far as downstream companies are concerned, both retailing segment and refining segment has been doing well, and we are pretty confident about the fact that the reforms that the government has initiated as far as petrol and diesel prices are concerned will continue. So, these companies are available at extremely attractive valuations for a 30-40 percent kind of a profit after tax (PAT) growth and we would definitely be having a big overweight on these companies," he said.
