ITC seems a good bet: Prashasta Seth

Prashasta Seth, Senior Fund Manager, IIFL Wealth, India Infoline in an interview with ET Now talks about FMCG pack.

The FMCG pack how would you want to play that lot?

We like ITC in that space the company has strong pricing power and we have seen it is a near monopoly situation so you have Marlboro trying to compete with ITC and GST essentially not raising prices to compete with ITC. But ITC continues to have such a dominant market share in the cigarettes category which essentially its cash cow and apart from that its food business has started doing well. It has broken even and probably going to have EBITDA margins in the range of 6% to 7% over the next year or so. Hotels business is also doing well and it trades at a 15% to 20% discount to companies in the FMCG because of concerns on the fact that to back over is essentially prone to legislation and higher taxes and so on but ITC has shown over the year its ability to grow with irrespective of the taxes and that looks like a good bet with a 1 to 2 years perspective both on a consumption theme in India and also the fact that it is in a near monopoly situation.