Amnish Aggarwal spots multi-year trends in 4 sectors. Here’s why
Amnish Aggarwal, Head-Research, Prabhudas Lilladher, says “there are some sectors or stocks that represent the multi-year trends; one clearly is capital goods which benefits from the recent state elections results as the uncertainty with regards to the next Lok Sabha elections has got reduced. So the capital goods companies, whether they are on the engineering side, railway side, defence should continue to do well. We like Siemens Hindustan, Aeronautics, and Carborundum looks good. The entire capital goods is one pack which looks very interesting to us. ”
What is your view on HUL and the rest of the FMCG players like ITC? Do you think in terms of the sector churn that we are seeing, the FMCG companies will not be in those top three, top four bets that investors would be looking at actively?
We have been having an underperformer in our model portfolio.
We are actually having lower weightage to the consumer sector from quite some time and that too the weightage is lower more for the consumer staples. Now, if you look at say past two-three quarters, the volume growth has been below par and mainly impacted by the slower than expected recovery in the rural demand, so that is one.
Secondly, particularly in the previous quarter, the margin expansion which was being anticipated on account of lower raw material prices, has also not been to that extent. Now given the backdrop that the rural demand is tepid plus most of the large companies they are facing increasing competition from the unorganised smaller or regional players has put these companies in some sort of a tight situation in the near term.
