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Last Updated : Jun 10, 2019 10:29 PM IST | Source: CNBC-TV18

Best to avoid auto stocks for another quarter: Centrum Broking

"We are not very negative on the outlook as far as FMCG is concerned," said Nischal Maheshwari, CEO - institutional equities and advisory, Centrum Broking.

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The revised circular issued by the Reserve Bank of India (RBI) on non-performing assets (NPA) is a positive step and it will help public sector undertaking (PSU) banks as well as corporate banks to resolve the issue of stressed assets, said Nischal Maheshwari, CEO - institutional equities and advisory, Centrum Broking.

"When the Supreme Court struck down its February 12 circular, RBI said that they will look into it and now it has come with a revised circular. So I think this is a positive step. Now we have to see does it help into the National Company Law Tribunal (NCLT) issues by cutting the timelines," Maheshwari told CNBC-TV18.

Two months after the Supreme Court struck down its February 12 circular, RBI on June 7 came out with a revised framework for resolving stressed assets wherein lenders have been given a 30-day period on whether to label an account as a non-performing asset.

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On auto stocks, “We are a couple of quarters away before we start looking at any of these auto stocks. But also we have to see what kind of rainfall we have. This is all delaying the process of recovery. So I think it is best to avoid for another quarter at least before you want to look at some of these stocks. Two-wheeler is the one which I would want to go out and put it on my radar. So two-wheeler is the stocks which I would look out but I would say it is best to avoid commercial vehicles (CVs) and passenger commercial vehicles (PCVs),” he said.

In terms of Hindustan Unilever (HUL), Maheshwari said, "People are hiding in the FMCG sector. We are not very negative on the outlook as far as FMCG is concerned. We continue to believe that the volumes have been okay, not as bad as the market expected in the last quarter. Hindustan Unilever (HUL) was slightly lower than expected. If we have a good monsoon and a well spread out monsoon, I think FMCG will be the first stocks which will recover fast. So put it on the horizon or on the radar but I think at the moment, I would say avoid HUL also."

 

Source: CNBC-TV18

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First Published on Jun 10, 2019 10:29 pm
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