Long-term investment in FMCG stocks unlikely to yield good returns: Nirav Sheth

In a chat with ET Now, Nirav Sheth, Edelweiss Securities, shares his view on the FMCG space.

ET Now: The consumer name, which has not done much in the volatility because of nature of company's business being slightly defensive, is ITC. What is your view on the stock?

Nirav Sheth: Well, the FMCG pack actually keeps on surprising me. About a couple of months back, we had actually written a report about how the so-called quality stocks are in a bubble.

I actually called them as stocks in a 'bubble' territory, given the kind of valuations they were trading at. I suspect that one of the reasons why these stocks seems to be doing well is essentially because the broader earnings growth of the market is still not very visible. Once the investors get broader areas to choose from, these stocks will come under pressure.

I will be very surprised if you make money by investing in FMCG stocks at current valuations from a 2-3 years' perspective.