Be selective in FMCG stocks, in infrastructure, wait for dips: Gurmeet Chadha

economictimes.indiatimes.com:

Gurmeet Chadha, Managing Partner & CIO, Complete Circle Consultants, says None of the FMCG names are less than 50-60 times. So, if they fail to deliver on double-digit volume growth and margin expansion, one has to be a little careful because a lot of the profit growth has come from realisations and not as much as from volume. So, one has to be a little selective. We are more keen on adding the likes of ITC, Tata Consumer in the portfolio in that space.

The commentary from most of the management has been pointing to a rural recovery, but would you buy the argument and buy afresh in these FMCG names?
Gurmeet Chadha: It is a combination of commentary being good and elections also playing a role especially as the rural spending picks up. It is a bit of a form of mini-stimulus. In fact, there is a very interesting report which talks of that there is actually some bit of labour shortage in industrial states like Maharashtra, Gujarat, Tamil Nadu as people go back to rural areas during election time and there is election-related spending which actually leads to some bit of reflection in the rural sales as well, reflecting in FMCG numbers as well.

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Also, there is a bit of a defensive move. Whenever you have an event risk approaching you, FMCG and pharma are ideal defensive places