Just looking at the entire consumption gamut, yes there has been a slowdown of sorts. If you had to pick and choose within the entire consumption space betting on the rural theme as well, some strong players that look good for the long haul what would they be?
When you talk about the consumer names like two-three trends which are quite visible. One is obviously the volumes have not moved up quarter on quarter. It is just marginally flat and there has been marginal growth for a few companies here and there. But one more important thing to note is that because of the fall in the commodity prices, there could be a margin expansion from coming quarters and this will lead into growth.
Secondly, I think if I have to talk about the companies which have delivered their numbers or which look interesting from here on I think in FMCG space one is Tata Consumer which we like and obviously the valuations for most of the FMCG companies have been expensive and I think that is also one of the reasons where the investors have been nervous giving this kind of a high PE rating.
There could be at least a 20% upside for the stock so I think one should look at this stock in the FMCG space.
Wanted to get in your thoughts then on the capital goods space. On one side, you have got Siemens which is clearly getting a big thumbs down on the back of all of the news that has come in, valuations according to the market experts are not at par and then there is L&T recently they have reiterated their revenue growth guidance as well as their order flow guidance saying that all of this is going to be achievable. Are you very selective when it comes to the capital goods space? Any particular stocks you like to bet on?
I think when we talk about the capital goods sector, select few large names are available and I think they are usually traded always expensive. So we have never gotten cheaper valuation. So if we have to select we have to get into names like Siemens or L&T or Cummins on that matter.
I think when we talk about select stocks from here, all the three look very interesting from my perspective. Obviously, Siemens has cooled down from the recent highs and all, obviously that looks interesting.
Cummins remains our top bet for investment. And thirdly, I think L&T I think you get a full-fledged investment overall bouquet and I think L&T also augurs well. I think the trends have been positive. We have seen the things coming back in the capital goods space, so I would advise buying all the three stocks for the portfolio.
