ITC still a top pick from a macro perspective: Gautam Chhaocharia, UBS

In an interview with ET Now, Gautam Chhaocharia, Head of India Research, UBS, shares his views on the FMCG/consumption companies. Excerpts:

ET Now: What have you made of the kind of weakness that we have seen in some of the FMCG/consumption names last week, the likes of Unilever and ITC?

Gautam Chhaocharia: We still remain underweight on consumption from a macro perspective. Some rural focused names will do well—like Dabur, Emami etc. Even ITC should do well from earnings point of view as ITC has more than 40 per cent of its business coming from rural India.

However, on a broader basis, the consumption trends are still negative and rural can provide only a boost to a small part for most of these companies and does not take care or compensate for the weakening in the broader macro environment.

Therefore, we remain underweight but in our view ITC still remains a top pick for us from a macro perspective.