Shreyash Devalkar on how to spot winning stocks in India's expensive market
"Auto industry is 1.4 times compared to its pre-COVID level. So, we have to look at what is relatively better when it comes to the valuation and one should look at in that context, especially at this level of markets," says Shreyash Devalkar, Axis Mutual Fund.
Nifty FMCG Index is actually at life-high levels. Is this really a right time to perhaps come up with a consumption fund or are you not concerned about valuations at all?
Shreyash Devalkar: Actually in the market, most of the indices or most of the stocks are at their premium valuations and they are at their peak valuations per se. Barring, actually, if you look at the re-rating which has happened across the board. So, it has happened across the board. It is like consumer durable companies, say capital goods companies.
So, capital goods companies, it has seen re-rating of almost 2.2 times from pre-COVID level. Services has seen 2.3 times. Speciality chemical has seen 1.5 times. So, absolutely, definitely, most of the pockets of the Indian market are absolutely expensive. Here, what we have to look at is what is relatively expensive. And if you look at in that context, then consumer staples valuation compared to its pre-COVID level has gone up by 1.3 times.
Auto industry is 1.4 times compared to its pre-COVID level. So, we have to look at what is relatively better when it comes to the valuation and one should look at in that context, especially at this level of markets.
I was going through your PPT. I could see hotels and resort is a part of the consumption
