Positive on Finolex Industries: Pankaj Sharma

Pankaj Sharma, Head-Equities at Equirus Securities told CNBC-TV18, "Finolex Industries has done very well, it's a phenomenal outperformer. We think the fundamentals for this company are still very positive because if we look at two-three things which matter for them - one, how the spend looks like on irrigation part and with the increased allocation from the Budget and with an expectation that there would be more investment flowing into irrigation, I expect that the demand from that segment would be very strong for them and that is a primary reason why we are still positive despite the stock doing so well in last 12 months or so." "We are currently struggling within the real estate and construction segment, there are lot of competence which Finolex has and they are more exposed to those segments and on a relative basis Finolex is having more exposure to the areas where we see strong positive momentum on demand side. Company specific, if you look at in terms of their product portfolio, they have increased the number of stock keeping units (SKUs), they have increased geographical presence, they are getting more and more into visibility on the products they have, more visibility on geographical diversification and both these things are very good," he said."So while on one side they have strong tailwind which the company would be getting because of higher irrigation spend and at the same time the company also doing a lot of things very right and that relates to filling the gap in the product portfolio which they had and also getting more geographically diversified and increasing exposure.""Britannia Industries is an interesting name. We have seen fast moving consumer goods (FMCG) companies in general, they have been struggling for some time because of impact on demand that is coming and also one phenomena which we are seeing that is coming from guys like Patanjali, where there is direct competition with many of these leaders like may be a Hindustan Unilever, Procter and Gamble Hygiene and Health Care (P&G) or could be many such companies, they are facing very strong competition from guys like Patanjali." "However, in the case of Britannia there was definitely in the last 3-4 years very strong push on filling the product portfolio gaps, they were not really present in some of these low-price segments and they have filled that and addressed that very well and also on the profitability side we are very positive on that because at this point of time there is a lot of positive momentum the company have in terms of cost control and also the raw material prices are largely in the manageable range.""So overall we think that this is the better placed name in the entire FMCG space competition, in comparison of that they have done much better, they have more visibility on the demand-side and profitability is definitely going to be good because the cost are largely under control. So in the entire FMCG space we think that this is a much better placed company and much better stock to look at for 12-18 months timeframe."