ITC top large cap consumer pick: Girish Pai

In a chat with ET Now, Girish Pai, Independent Analyst shares his view on the FMCG pack in general and ITC in particular.

ET Now: ITC is still considered as one of the safest large cap stocks to own but for those who bought ITC in last one year, they have made money in line with market returns do you think the spring time for FMCG is over?

Girish Pai: I would say that for selective consumer stocks especially those which have valuations PE multiples of 35 to 40 times even on FY-15 earnings numbers. For those stocks, I would think that returns are going to be sub market, whereas I do not expect that from ITC.

Its valuations are not that expensive even at this stage. If you look at the competitive dynamics in ITC's core business, it is a monopoly there and despite a fairly sharp dip in volumes in this particular quarter it was able to show pretty decent EBIT growth and earnings growth.

Therefore, it is a stock that I am not so worried about. It is a large cap that is there in most portfolios so, to that extent it may just about perform in line with the market. That is the way I see it, but if I were to hold one large consumer stock it would be ITC.