Should you buy FMCG stocks on dips?
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Last Updated: May 15, 2021, 09:38 AM IST
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FMCG stocks now because they do not have enough business catalysts. Edited excerpts from his interview:
What is your understanding of the strength we are seeing in midcaps and smallcaps?
It indicates that the fundamentals of the broader market is improving. The expectations are being met. A company like Prince Pipes beat EPS estimates by 20-30 percentage points. This quarter will be a fairly good one, especially for export-oriented companies.
What is your reading of the management commentary of Asian Paints?
As a stock, it has underperformed in the recent past and so there is some amount of catch-up trade happening. While the prices of its raw material has moved up along with oil, given the second wave of Covid in Asia there is an indication that oil prices will remain in check. Therefore, prices of raw materials for Asian Paints will also remain in check. While the second wave
How do you think the second wave of Covid can impact financial stocks?
Undoubtedly, there are certain pockets in financial services like microfinance, commercial vehicle financing, unsecured personal loans, etc, which will get impacted far more adversely because of the second wave. One interesting observation from the last nine months is that banks have started providing for Covid-related costs in provisions. This has ensured that there is a reasonable built up of provisions in their balance sheets. So the balance sheets will be relatively better in terms of secured loans, auto loans, housing loans and large company loans.
Do you see more room for growth in IT and pharma?
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ETMarkets Investors Guide (ET Online) Do consumer stocks remain the best defensive bets for investors?
14:38 Min | May 09, 2021, 11:25 AM IST
As soon as the second wave of Covid hit us, the market s attention naturally shifted to defensives like IT, pharma and FMCG stocks. But while IT and pharma outperformed the market, FMCG has lagged behind and even eroded 2 per cent of investor wealth in the last one month. In today s special podcast with independent market expert Rajiv Nagpal, we put consumer stocks under the lens to understand why the market is punishing these traditional defensives this time around. Listen in.
Lockdowns have a silver lining for FMCG, pharma stocks
Most of the FMCG and pharma stocks have been trailing at premium valuations, not justifying a major upside.
Synopsis
Lockdowns have rekindled bullishness in FMCG and pharma stocks with companies expected to report exceptional sales in the short term. The ET Pharma Index has gained 5.3 per cent in the past one month with a price-to-earnings (PE) multiple of 33.4.
ET INTELLIGENCE GROUP: Stocks of Cipla and Cadila Healthcare hit new highs this week. Both companies are among the leading manufacturers in India of the direly-sought Covid drug Remdesivir.
The stock of Dr Reddys Labs (DRL) has gained 9 per cent in the past one month with the company recently getting approval for importing the Sputnik vaccine. The stock price of Glenmark Pharma, another manufacturer of Remdesivir, is 4 per cent shy of hitting