Move out of HUL and ITC from FMCG pack: Prakash Diwan

In a chat with ET Now, Prakash Diwan, Chief Portfolio Strategist, Prakash Diwan's Wealth Circle, shares his views on FMCG stocks.

ET Now: Markets have not been bullish but extremely bullish on HUL and ITC. Do you think sensible investors should now log out of HUL, ITC and they should buy into infra, maybe a BHEL like we discussed, maybe something like an L&T?

Prakash Diwan: Yes, definitely HUL has played more of a catch up game for all the lost time that it had so many years where it did not kind of get into this valuation and leadership position, but I definitely feel yes, you could take some profit off the table. Distinctly valuations are getting slightly stretched there and in case even if growth were to be above average or average, from an FY14 perspective, we have already priced in whatever upside we could.

There could be some more benefits, some more risk reward. From a risk reward standpoint better options available in the smaller FMCG companies or the new age FMCG companies. Dabur has been a prime example, Godrej is catching up, Marico has certainly caught up. So you have certain opportunities there and definitely makes sense to move out of at least HUL and ITC from that pack.