We prefer cos which enjoy inelasticity of demand: Ritu Arora, HSBC OBC Life Insurance

Ritu Arora, CIO, Canara HSBC OBC Life Insurance, in a chat with ET Now, talks about her preferred stocks


How do you play defensives right now?

Within consumption stories, I would prefer companies, which have lower sensitivity to cost. I believe that the cost pressures will undermine profitability over the next couple of quarters and not all cost increases, they would be able to pass on, so we would prefer companies, which have less competition and enjoy inelasticity of demand and relatively less pressure on costs be it packaging or raw material. Otherwise we prefer larger cap exposures to Nifty, which itself is a defence because then your movements are aligned with the index and relatively better positioned because of the strength of balance sheet and possibility to still raise money and to pass on the cost increases, so we prefer Nifty. Within Nifty, selective FMCGs, not necessarily all the names or some pharma stocks or even some IT companies, so that’s how we have positioned our portfolio.