“At its lowest in the last one year, we had fallen down to about 20% equity exposure in our total portfolio. Today we are at about 40% in equity. Irrespective of where markets go, if I keep seeing stronger economic data, I am going to try and revise it and take it up to 50%,” says Rajat Sharma, CEO, Sana Securities.
Markets have rallied from the low. We are at 16900 now. Should one look at these stock prices with caution? How should one approach the market if you want to put in fresh money?
To be honest, I am not as cautious about the market as I was about a year ago and the reason is that even though we have not fallen as much as I think we should have liked from 18,600, today we are trading around 16600-16900. I would think one cannot miss these markets. One should not be staying out because a few sectors are clearly going to benefit from whatever happens going forward.
Any incremental money should go into consumption and FMCG as a sector and particularly stocks like
, where I have been bullish for the last one year. On Monday, the company comes out with results. I expect a very healthy growth in their segmental revenue portion. Cigarette volumes will probably pick up because this is the first complete quarter with no lockdowns. There has been no revision in excise on tobacco as well. All of that will give them a lot of strength going forward.
Right now, at this level, I am betting on FMCG and consumption doing very well. That is one sector in the market where incremental money should go. At its lowest in the last one year, we had fallen down to about 20% equity exposure in our total portfolio. Today we are at about 40% in equity. Irrespective of where markets go, if I keep seeing stronger economic data, I am going to try and revise it and take it up to 50%.
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I don’t want to see these stories because
Keep in mind that I am not talking of a portfolio which does not get incremental money. This is not a PMS scheme where if I am at 50%, I remain at 50%. I am going to be affected by markets. This is a portfolio where if we were 40% in equities and do nothing for the next six months, the incremental money which keeps flowing into your portfolio will take the equity positions down to about 30%.
The other stock that I am adding is
. And they are ahead of their pre pandemic levels in terms of volumes and which is what the CEO said.
The revenues have grown around 16%, the problem with them is for most consumption FMCG stocks is that their expenses have grown about 13% and the reason for that is as the management flagged out higher input costs, higher inflation, raw materials have become expensive. There was a supply constraint on Scotch whiskey also. Going forward, this is a sector and these stocks in particular where I have put in some money.
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