We like FMCG space: Vetri Subramaniam, Religare Mutual Fund

Vetri Subramaniam, Head - Equity Funds, Religare Mutual Fund, in a chat with ET Now talks about the FMCG space.

Do you like FMCG stocks, if yes, which ones?

I cannot give you a stock specific thing. We own several of the large FMCG companies. Our concern with FMCG companies has really been more their valuations. Some of the stocks have corrected in recent months but valuations are still not particularly attractive in that area.

Over the medium to long term that is still an area that we like because the domestic consumption story is still intact. But in the short term, these companies are facing significant pressures in terms of raw material price inflation and it is not possible that all companies in India pass on this entire raw material pressures that they are facing to the consumer because eventually that will lead to consumers pulling back due to a stick of price shock or the inflation shock.

So shorter term, there are concerns in FMCG. We are still overweight the sector in many of our funds but we have not really been adding into any of these. The stocks perhaps could fall more before they reach levels where we have gone to increase our exposure to the sector any further.