Marcellus Investment Managers said it will continue to focus on stocks of consumer goods makers irrespective of the current market cycle.
“The markets will look out for companies which deliver profit growth irrespective of the macro concerns. Therefore, we will focus on companies that produces essential goods, cater to the larger section of middle-class consumers...have quasi-monopolistic position and good corporate governance,” Pramod Gubbi, co-founder of the investment advisory firm, told BloombergQuint in an interaction.
This comes even as Indians are buying less of consumer goods, cars and appliances amid a slowing Indian economy. That, coupled with global trade war concerns, have kept investors on the edge.
“India has always been a bottom-up market. It has also presented stocks that could create wealth whether or not it has hit the bottom in the last couple of years,” Gubbi said.
Key highlights from the conversation:
On Auto
- Demand due to its discretionary nature is facing a slowdown.
- Auto slowdown is cyclical in nature not structural.
- Positive on two-wheelers among others in the segment.
On Government Reforms
- Rollback of enhanced FPI surcharge a ‘big positive' move.
- Reforms to take some time before they start paying off.
- Expects economy to revive after a few quarters.
WATCH | Marcellus' Pramod Gubbi on why he is bullish on FMCG stocks
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