Indian consumption theme to under perform this year: UBS

Gautam Chhaochharia of UBS India expects Indian consumption theme to under perform this year.
 
Chhaochharia told CNBC-TV18, “We had ‘sell’ recommendation on both Jubilant Foodworks and Tata Motors for a while. Numbers in terms of street estimate and valuations both are a concern. We expect Indian consumption theme to under perform this year. For both the stocks, earnings estimates are far ahead of reality and valuations are at significant premium to peer group as well as at near all-time highs. So from this point of view the risk-reward is clearly way down.”
 
“Given our short-term view on the economic activity we see consumption activity to be moderated over next couple of quarters and that will lead to earnings disappointment which we have seen for both of the stocks,” Chhaochharia added.