Petronet, IGL, GAIL witnessing re-evaluation: Prakash Diwan

In a chat with ET Now, Prakash Diwan, Director, Altamount Capital Management, shares his view on Petronet and other oil and gas stocks. Excerpts:

ET Now: We were talking about Petronet LNG and we highlighted that stock. Is there a view that you hold on that one?

Prakash Diwan: Petronet, IGL and GAIL, if you look at the entire pack for, of course, there are different trigger supporting each of them for the last mile move that we have seen but very clearly there is a re-evaluation, re-rating of sorts, the way people are looking at this sector which was kind of ignored for quite some time when all the OMCs were hogging the limelight. Here the play on gas is going to make a big difference particularly the ones who are in the city gas distribution matrix because that is an extremely high margin business and that could change the kind of scale with which they operate. Mind you, it is in the government interest to show some sort of early wins out there particularly in a power hungry starters that we kind of have in most of the areas, the western grid, Delhi, all of them are getting into that power starved zone. So if you have at least something else that is moving on the right lines, it is politically also a win for them. So they will do something in terms of changing that from a pricing/regulatory perspective and that is going to help all of these guys very significantly.