Daljeet Singh Kohli says: Q3 numbers for consumer companies will not be so great because one that almost half of their business is from the rural side and there is no recovery in the rural side, which has now started slowly and steadily in tier-four, tier-three towns. Q3 numbers are expected to be muted. Time is coming for consumption stocks but we will have to wait for another one or two quarters at least.”
“I expect these consumption-related stocks, sector earnings to be better and some amount of capital drag to come in so that capital will push up the prices there. From a tactical point of view till the elections, rural-oriented consumption is probably going to get a little more capital and tactically, it makes sense to allocate a little more into that at this point in time.”
“A sectoral rotation is going on. Pharma and realty are seeing much more delta which has been lagging in the consumer space. I still think the wedding season and the impetus going forward will see these stocks regain their momentum but like I said, earnings may have priced in the best for some time.”
The Bajaj Consumer care stock has given a return of 28.88 percent over the past six months. The benchmark Nifty50 index has given a return of 5.91 percent over the same duration.
“I really do not understand the global setup, the way it is, and why FII selling continues despite India shining and despite so much positive news globally on India. That is a difficult phenomenon to understand. And yet domestic flows remain extremely strong. So this is the time to focus on individual stocks rather than the market as a whole. ”