Avoid FMCG stocks: Shankar Sharma

In a chat with ET Now, Shankar Sharma, Chief Global Trading Strategist, First Global, shares his views on FMCG space

ET Now: What about FMCG?

Shankar Sharma: That is a tricky one. I have not been able to make up my mind to be absolutely honest with you on what to do with these companies. I have said this also on your show before that I do not ever buy FMCG stocks for my personal account because they are not the kind of stocks that excite me. They are mutual fund investors stocks that they will make you 20% in a good year and in a bad year they will be down 5% or 6% while the market is going to be down 35%. But that is not why I enter equity markets. I want to make 50% or 100%. I do not want to waste time making 20% or 20% outperformance gains. For institutional investors this is a reasonable safe place to hide in when things are tough. Things are tough, but while these stocks have done well, valuations have been really really stretched. I do not have a clear mind, but we downgraded them recently. We had an outperform, we downgraded into market perform. We will see how that pans out, but I really do not have a clear answer on that.