ITC likely to do well in long-term: Avinnash Gorakshakar

In a chat with ET Now, Avinnash Gorakshakar, Head of Research, Miintdirect.com, shares his views on markets. Excerpts:

ET Now: Let us start with ITC. At a time when the FMCG index is not far away from record high, stocks like HUL, Asian Paints are sitting at a record high, how come ITC has been such a marked underperformer?

Avinnash Gorakshakar: I would presume that clearly in the near term, the kind of taxation and excise duty which has been put on cigarettes. My sense is in the near term, volumes would definitely get a hit although there is no doubt that ITC has got great amount of pricing power, maybe give it a little more time and definitely ITC would bounce back. But in the shorter term, the market is concerned that volume degrowth could be much higher and that could possibly impact its profitability. So I would say that only those investors who want to really take a longer term call could only invest here. Clearly, if you look at FMCG sector, stocks like Dabur or Britannia have actually clearly outperformed the sector. The Q1 numbers have also been very strong. So related to that ITC would take a little longer but definitely long term prospects would be good.