Why Gautam Duggad is overweight in IT & private bank stocks; down to neutral in consumption
Gautam Duggad, Head Of Research, Director — Institutional Equities, Motilal Oswal, says in consumption stocks, they are down from big overweight to neutral. They are more positive on IT, private banks, real estate and industrials, where they have increased weight. They used to be significantly overweight on consumer discretionary in our model portfolio for the last three years. But even there, they have cut some weights. They used to hold 11 consumption stocks, out of which 9 were discretionary till July. Now, that is down to 6 or 7. On the other hand, in private banks, they are overweight after two years and Tech, they have gone overweight in July. In October, they made it even bigger overweight.
What about the underperforming pockets. Pretty much all of consumption has been subpar, as per Street anticipation. Do you think much of the pain is in the price, especially for some of the paint and FMCG categories and do they now become attractive buys or is the pain going to linger on for the next few quarters?
Gautam Duggad: Consumption is a very broad ocean now. It is no longer just FMCG. You have at least 10 sub-categories in discretion apart from staples. Staples have clearly slowed down and the signs were visible even a few quarters back when we were seeing urban growth coming off. Today, we are in a situation where as per the Nielsen or some other syndicate data which has come out a couple of days back, the urban growth has come down with just 2.8% at a very top-down industry level, which was 11% a year back.
Ru
