HDFC AMC's Prashant Jain is not very optimistic consumption space, especially the consumer discretionary and staples because of higher valuations.
Prashant Jain, executive director and CIO at HDFC Asset Management Co (AMC), is of the view that the domestic economy is doing well and there aren't too many challenges that could hamper growth.
"Currency depreciation is not a big worry, Indian currency is not isolated in its weakness. Moreover, it is good for earnings of most sectors like IT, Pharma, banks and even FMCG," Jain told CNBC-TV18 on October 24.
When asked if the current market situation was anything akin to 2008, he said, "It would not even be fair to compare because there were no parallels at all. Currently, domestic economy, US economy are doing fine, the corporate leverage unlike 2008 is not very high."
With regards to the current debt issue and less liquidity in debt markets, Jain said, "NBFCs as such are only one small segment of the market and weightages of the stock is not high in the index and the stocks in the index are not facing any problems, so should not worry too much on this account as well."
"Moreover, those NBFCs that are facing challenges can overcome them through various means like selling assets etc., he said. So don’t see serious challenges to the economy on that account," added Jain.
Jain is not very optimistic consumption space, especially the consumer discretionary and staples because of higher valuations.
"Not only are their valuations expensive but growth rates for them may not materialise. So far growth for them was supported by retail loans by NBFCs but that could now moderate," he added.
According to him, largecaps are better placed than smallcaps. "Other than consumption stocks most sectors like metals, IT, banks, utilities etc are fairly valued or even undervalued," he said.