FMCGs are a good bet on revival of the Indian economy: Dipan Mehta

In a chat with ET Now, Dipan Mehta, Member BSE and NSE, shares his views on FMCG sector

ET Now: The likes of Dabur, Marico over the last couple of sessions have done great in FMCG space, Nestle had a massive move too, what do you do with these companies, what are you advising your clients to do here?



Dipan Mehta: We prefer the Indian FMCG companies over the MNC FMCG companies but the run in HUL has clearly brought the focus back on to the entire FMCG sector, Indian as well as MNC, and the up move in HUL has resulted in the entire sector’s PE multiple getting re-rated upwards and clearly there is going to be a major beneficiary of declining oil prices.

Most FMCG companies are extremely asset like, do not require much capital so there is high degree of scarcity value in their listed stocks so keeping all that in mind, investors have to just look for opportunities to increase their exposure to FMCG companies and no doubt the valuations are on the high side but then these companies continue to expand and grow in terms of top line, bottom line and in a way they are good bet on revival of the Indian economy and as such a defensive play for the investors as well.: We prefer the Indian FMCG companies over the MNCFMCG companies but the run in HUL has clearly brought the focus back on to the entire FMCG sector, Indian as well as MNC, and the up move in HUL has resulted in the entire sector’s PE multiple getting re-rated upwards and clearly there is going to be a major beneficiary of declining oil prices.

Most FMCG companies are extremely asset like, do not require much capital so there is high degree of scarcity value in their listed stocks so keeping all that in mind, investors have to just look for opportunities to increase their exposure to FMCG companies and no doubt the valuations are on the high side but then these companies continue to expand and grow in terms of top line, bottom line and in a way they are good bet on revival of the Indian economy and as such a defensive play for the investors as well.