Is it smart to exit HPCL ?

I got the below comment and thought of posting on it.

Rohit,
I am not sure if abandoning HPCL is such a good idea right now. You can buy good stocks at bargain only during distressed times. First crude prices will definitely go down. its just a temporary blip and secondly government cannot afford to shut down these PSU oil companies. Definitely PSU oil companies are not a long term bet for me..but for the short term ..i guess there is an excellent opportunity as of now. I know i can be wrong.

Selling is always a difficult decision especially if the underlying assumptions change. I personally analyse my stocks every quarter and more frequently if the underlying situation changes. In case of HPCL, I was banking on two key points
- Margins will not deteriorate drastically and maybe improve a bit in the next 2-3 years as other initiatives from the company bear fruit.
- market would realize that the company sells at 20-30% of asset values and will reduce the gap

Clearly the spike in Oil prices has invalidated the first point and the second may not happen soon due to point 1. I rarely make sell decision by short term drops in price. If the intrinsic value of the company is steady or growing, I will hold on to the company for a long time.

In case of HPCL, my key concern is that the intrinsic value of the company is being destroyed on a daily basis and at a very rapid rate. Time is not on my side in this case. The current oil price may turn out to be temporary. However I am not willing to bet on that as, the longer the oil price remain high, the more the company will bleed.

Finally an investment idea needs to be compared with all the other options or ideas. As of now, I can see other ideas which are better from a risk reward perspective and hence I decided to move out from HPCL.