May see uptick in cyclicals going ahead: Anand Tandon

In a chat with ET Now, Anand Tandon, CEO, JRG Securities shares his viewon cyclical stocks:

ET Now: Cyclical stocks may have corrected yesterday, but in general cyclical stocks across the board are up more than 20 to 25% from the recent low so what explains the recent fervour in cyclicals speculative froth or hopes of recovery?

Anand Tandon: The front line stocks have moved up way too much, the valuation gap was very high. The assumption being made now is that we will eventually get the cycle down in terms of the interest rate if not today then may be in three months or six months from now. Uptick may happen more in cyclicals than in the defensives or the steady growth company.

Clearly companies like FMCG are way too expensive to explain any kind of growth. Going forward 40% growth from the bottom in cyclicals is going to be become a lot tougher.