Midcap IT offers greater growth potential amid market saturation of largecap stocks: Nilesh Shah
«The fact that they have access to millions of the kirana stores, neighbourhood stores which has helped them to enjoy margins versus that on the product side you have seen the entry of private labels coming,» says Nilesh Shah, MD & CEO, Envision Capital.
But other than that what about overall consumption and let us pick on staples first. There is that slowdown, one has felt the heat in the earnings as well, but do you think the stock prices have absorbed all of that?
Nilesh Shah: The big FMCG companies are continuing to face problems. My view is that they are facing a structural slowdown not because we are not consuming more, it is just the way we consume has changed and changed quite meaningfully.
So, if you look at all the big players in this space who have done wonderfully well for the last maybe 20-30 years not just last few years but the last 20-30 years, their mainstay has been essentially the general trade.
The fact that they have access to millions of the kirana stores, neighbourhood stores which has helped them to enjoy margins versus that on the product side you have seen the entry of private labels coming.
Second, we have seen a lot of well-funded smaller challengers out there who are coming out with innovative products and the third is essentially e-commerce and quick commerce and with quick commerce guys, e-commerce guys you are really not in a vantage position, you cannot dictate the terms of trade.
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