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Valuation still attractive in consumption space: Harendra Kumar

ET Now Feb 8, 2013, 01.11PM IST

In a chat with ET Now, Harendra Kumar, Managing Director-Institutional Equities, Elara Capital, shares his views on consumption space.

ET Now: How are you going to approach some of the consumption names as Titan as well lost a fair bit yesterday and Tata Global Beverages too has not had the best of days?

Harendra Kumar: The consumption pack you saw had a huge polarisation last year. When you saw that some of the stocks had significant PE rating and now that seems to be coming off, but there are pockets of valuation in consumption. For that matter Dabur which is just looking to play catch up, you have Marico, you have Berger Paints.

The paint story is coming, shaping up very beautifully in terms of volume and value growth. So there are pockets of value consumption that are strong but there is valuations mismatch.

The valuation arbitrage between some of the large-cap and some of the second third incumbents within the same space should be more profitable as a trade than sticking to the larger themes.