The FMCG space is looking attractive since consumption as a whole is expected to improve and the Government’s efforts to boost economic growth will aid in increased expenditure by the rural and urban masses, Umesh Mehta, Head of Research, SAMCO Securities, said in an interview with Moneycontrol’s Kshitij Anand.
Q: It has been a roller-coaster week for Indian markets. We saw 40,000 on the Sensex and the biggest one-day fall in 2019. What is your advice to investors and traders? A choppy market till Budget? What are the big levels to watch out for in the coming week?
A: This week, Market has witnessed the biggest single-day fall of 2019. Due to the massive levels of volatility, traders are advised to selectively short bets.
On the other hand, Investors should stay on the side-lines and book profits whenever possible. Indian bourses are expected to stabilize around the Budget. But, till then, they would be under pressure. The level of 11,600 would be key to watch out for in the coming week.
Q: More than 100 stocks have hit a 52-week low on Friday? It looks like, with lingering growth concerns and NBFC crisis, concerns over the mid & smallcap space is far from over. What are your views?
A: Mid and smallcap stocks have faced massive carnage in the past year. Hence, there is some valuation comfort there. But, unless the liquidity crises are sorted out, no fireworks are expected.
This space should definitely be on an investor’s radar with a few quality picks in the shopping basket.
Q: What should investors do with NBFCs stocks? Should they switch over to private banks?
A: Since NBFC stocks have already faced the wrath of the liquidity Gods, selling these shares at the current levels will do no good to an investor.
Hence, instead of panicking, investors should let the tide pass and wait for the situation to settle instead of panic-selling at a loss.
Q: What is your advice in Bank Nifty for the coming week?
A: Bank Nifty has elevated to heightened levels. Since there is pressure all around due to the debt implosion, sell on rise would be a good strategy to play for the coming week.
Q: Any sector which is looking attractive and any top two-three stocks inside the sector which are looking ripe for cherry picking?
A: The FMCG space is looking attractive since consumption as a whole is expected to improve and the government’s efforts to boost the economic growth will aid in increased expenditure by the rural and urban masses.
Godrej Consumer Products and Hindustan Unilever are well placed in this space and are decently priced. HUL, being the leader, has a massive demand for its products and has a good grip on their business operations.
Godrej Consumer, on the other hand, has consistently provided double-digit ROE and bottom line growth. Also, it has a huge margin of safety when looked at its charts.
Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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