You have a view across the entire market in terms of sectors. All the broad-based Nifty sectors have now tilted into the red, with Nifty PSU Banks, Realty, and Pharma among the biggest losers today. What is still managing to hold on—or rather, showing the least cuts—is the Nifty Metal and Energy space. What is your outlook on these two sectors? While we’ve just discussed metals, we haven’t revisited energy as a theme in quite some time. What’s your take there?
Anand Tandon: On the geopolitical front, there was a small spike in prices based on expectations of further restrictions on Russian oil. But it now seems that such measures will only materialize much later, so there’s no immediate impact on the market. We actually saw some respite because of that.
From the Indian market’s perspective, there are very few companies you can meaningfully invest in within the energy space. This is largely because retail-level prices are controlled by the government. Every time crude prices rise, retail prices are adjusted upward, but when crude falls, retail prices rarely drop. So, a cushion has already been built in.
In the near term, I don’t expect any significant movement. The only change we might see is if crude prices rise sustainably—then ONGC might tick up slightly. On the power side, if we include that within the energy basket, most of the action is in solar. But I would actually prefer to look at grid-related investments. Companies involved in grid infrastructure and its expansion are more attractive from an investment perspective. Apart from that, the market appears to be priced to perfection.
That’s an interesting point about sanctions, especially the ones major countries are demanding on Russian oil. Do you believe such sanctions could materially impact global markets? Does this scenario carry a real probability of happening? As you mentioned, ONGC might benefit if it does—but what’s your broader view? Can global sanctions on Russian oil escalate, and what might that mean?
Anand Tandon: Sanctions on Russian oil already exist. What’s currently happening is that there’s an effort to lower the price cap at which Russian oil can be sold. That adjustment has now been postponed until January.
Let’s be honest—the West doesn’t usually act against its own economic interests. While India may be criticised for increasing its oil purchases from Russia, the reality is that a large share of refined petroleum products from India is re-exported to Europe. So, in truth, Europe is benefiting from the current arrangement. Our refineries are doing well, which is beneficial, but it’s not driven by domestic consumption.That said, there is a possibility of further tightening of Russian oil prices, which could marginally constrain supply. However, given the state of the global market, that’s largely offset by weak demand, so we’re not seeing any major disruptions.At this stage, rather than focusing on energy, I believe a more pressing issue is the rare earth metals sector, which remains under China’s stronghold. While China has eased some pressure in the last month, I view this as a long-term strategic risk. They control a significant portion of this supply, and that leverage will likely persist for the foreseeable future.
