Focus on beaten down largecaps in banking, consumption sectors: Rajat Sharma
Rajat Sharma, Founder & CEO, Sana Securities, says he is looking at beaten down largecaps which have not been performing on account of difficulties they are facing in their sectors. Consumption and banking are the two sectors where he is focusing right now. In FMCG, one such stock is Asian Paints. Sharma has never liked the stock when it was trading at about a 100-105 odd price earnings multiple three-four years back, but right now is a very, very good time to buy this stock. Among banks, he likes HDFC Bank. A rate cut could be very good news for them.
It has been quite a cheer in the last one or two weeks, the major event is already through in terms of Union Budget but the RBI policy is on its way. Help us with your reading on the markets as well as the sectors that you like at this point.
Rajat Sharma: Both my reading on the markets and the sectors I like have a lot to do with the events, one, which has gone by and the other which you speak about – the monetary policy meet and the Union Budget. I have consistently maintained for the last few weeks that consumption as a sector was extremely undervalued and within consumption, consumer staples, FMCG stocks is what I have liked and with the way the income tax slab rates have been revised, obviously some value will emerge as the volume growth comes back.
Although for a lot of these FMCG companies the problem was not just slow volume growth on account of people not spending on the product, it was also high food price inflation which peaked out in November, when it
