Consumer stocks to lead the rally for at least a year or more: Gaurav Dua

economictimes.indiatimes.com:

Gaurav Dua, SVP, Head — Capital Market Strategy, Sharekhan By BNP Paribas, says consumer is a structural story. What you are going to see is that the household income is going to more than double over the five to eight years in India and that is the space where we see that there are going to be lot of multi-baggers that will be available at the right price for the investors.

Let us start with the unsecured lending side of the business. UGro, Five-Star, SBFC, have been doing very good numbers in the last few quarters. I am seeing some of them flow out in this quarter as well. But the fear is that asset quality may come at risk now and hence the valuations have got depressed in that area. Is it an opportunity to build in portfolios or will you still stay away from this side?
Gaurav Dua: The fact that some of the states have already started to announce farm loan waivers is something which is like this concerning the market because if you are exposed to the microfinance industry or you have a high exposure to this unsecured loan, this basically spoils the whole borrower attitude, basically. This has been one of the risks. In the case of private sector banks, cost of funds are likely to go up and that is an additional concern about these NBFCs.

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