Johnson & Johnson products are displayed for sale in a supermarket. (Photographer: Scott Eells/Bloomberg)

Be Selective With Consumer Stocks, Kotak Mutual Fund Says

The consumption sector continues to remain an attractive bet at current levels but investors should be selective while picking stocks, according to Shibani Sircar Kurian of Kotak Mutual Fund.

Underpenetration of the consumer sector will provide opportunities for volume growth, Kurian, senior vice president and head of equity research at Kotak Mutual Fund, told BloombergQuint in an interview. “What worries us is how these stock prices have moved up and that’s where we need to be mindful,” Kurian added.

Here are the key highlights from the conversation:

  • Focus remains on domestic consumption play.
  • Stocks of non-discretionary, auto, retail private sector banks and a few select non-banking finance companies offer buying opportunities.
  • Have been cautious on ferrous metals.
  • Expect the Reserve Bank of India to gradually increase rates. Rates hikes, if at all, will happen, in the second half of the year.

Watch the full interaction here: