Cash flows of FMCG sector remains strong: IV Subramanium, Quantum AMC

In a chat with ET Now, IV Subramanium, Director, Quantum AMC , shares his views on the FMCG sector.

ET Now: With each passing day, the fundamental case for FMCG and consumer name is only getting diluted but markets are still calling them defensives, why is that?

IV Subramanium: Yes, the cash flows of many of these companies still look quite good and even though the things are declining, it is not as bad. In the banking stock, power stock or an infrastructure stock the slowdown seems to be more severe than the case of consumer staples.

From our side, apart from the overall slowdown in the consumption space, it was purely a valuation issue. There was no point in holding onto the consumer staples which has a PE ratio upwards of 30 times because we could not see any reason to justify holding onto those kind of stocks. There are others who do look at these numbers and still feel comfortable holding on.