Jyothy Labs is clearly a long-term story in FMCG space: Dipan Mehta

In a chat with ET Now, Dipan Mehta, Member BSE & NSE, shares his outlook for the markets.

ET Now: Give us an idea that is high-conviction for you.

Dipan Mehta: We will look at a small FMCG company called Jyothy Laboratories. They have come out with a very decent set of numbers for the September quarter. Clearly, the acquisition which they made has benefitted this company. The growth rates are certainly higher than some of the other FMCG cos. I would also say the valuations are quite reasonable. The management is very forthcoming and dynamic, and they want to grow the business.

Another advantage is that they are expanding within India across regions where market shares are not on the higher side. That opens up new geographical markets for the company. My sense is that over the next three-four years this company could be double or triple its current size. As the size of the FMCG business increases, a lot of operating leverages will come through. And markets also pay higher PE multiple.

Clearly, this is a long-term story. There could be minor disappointments on quarterly basis, but we are quite optimistic and positive on the company.