ITC continues to be a better bet than HUL, says Manish Sonthalia, Fund Manager, Motilal Oswal Securities.

Sonthalia told CNBC-TV18, "Within the auto space clearly Mahindra is valuation wise cheaper than maybe a Maruti, so you continue to see outperformance in Mahindra vis-à-vis a Maruti or within the two wheeler space everything is valued in the same FY 11 basis everything is trading at 12-13 times. So I think there is no case of outperformance for Tata Motors because we think that the stock is over valued. But  the CV space is expected to grow very strongly in FY11, so would not be surprised if we have to see something like 20% volume growth in the CVs. We are seeing that on a sequential basis as well so. There is a lot of churning happening within sectors.”

He further added, “Talking about FMCG, ITC continues to be a better bet than HUL. If you want to see the second quarter numbers I think HUL disappointed on both margins and volumes. ITC actually has done well on its tobacco and non tobacco businesses. So there is a lot of churning there.”

Disclosure: It would be safe and fair to assume me or my clients would have a direct interest in the above stocks.