Advising clients to move to Dabur, Marico from HUL and ITC: Harendra Kumar, Elara Capital

In a chat with ET Now, Harendra Kumar, Managing Director-Institutional Equities, Elara Capital shares his views about the consumption space.

ET Now: How exactly do you propose that one should play the consumption theme because FMCG is expensive, the earnings are unpredictable in pharma and most of the auto stocks have not reported good set of numbers?

Harendra Kumar: In the consumption space, we are advising some amount of tactical shift from HUL to probably Marico and Dabur.

We have just come out with a report of the whole consumption basket and we see that there is a valuation arbitrage between Dabur, Marico vis-à-vis the larger ones because in the larger ones the PE rating has already happened.

But in the meantime, there has been certain structural benefit that has come up for Dabur and Marico where the distribution network has changed, the valuation is cheap and the categories are looking to grow.

So, we would advise some amount of tactical shifts in the consumption at this point of time.