What should one do in the crude-related counters? Sandip Sabharwal answers
Sandip Sabharwal, asksandipsabharwal.com, says there is much excess capacity in crude now, and with a huge number of LNG gas projects coming on stream next two to three years, the overall crude and oil and gas basket will remain subdued. So, it is going to be a good two-three-year phase unless and until something very significantly negative happens geopolitically. The next two to three years with the normal volatility in these commodities should be fine for the consumers.
Sabharwal further says that as the market rally continues across sectors, which company you need to book out of or which you want to hold, will depend on relative valuations.
What is the outlook on traditional defensives that have been proving their might? FMCG & pharma counters have been at the forefront in the last few weeks. Is there more to go?
Sandip Sabharwal: Given the valuation the markets have reached, there is a high probability that defensives might outperform as the markets stall going forward, which they should. The same pace of upside is very tough to maintain. Now, the key for the performance of these companies from here on, on absolute terms, how much percentage gain they can give will also depend on the actual volume recovery and what actually has been the impact of good monsoons, etc, improve sentiments on rural, urban demand for the products of these companies.
The initial up move in these stocks has been led by the consumer stocks, has been FMCG ones, has been led by the forecast by these companies that things are going to
