Tushar Pradhan, the chief investment officer of HSBC Global AMC, spoke to CNBC-TV18 about the fundamentals of the market and shared his views on sectors such as the FMCG and banking.

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When asked whether there would a re-rating for the financial sector post the fourth-quarter earnings, Pradhan said, "The earnings have been more or less on expected lines. It is difficult to see whether there is going to be re-rating back to the previous levels of valuations because a lot of expectations were build up in terms of growth but most of the banks, NBFCs have curbed their growth expectations. So, there will be time for consolidation before we see any re-rating in the sector going forward".

Talking about the FMCG space, he said, "There has been significant upside to earnings and margins in the last three years. Some of the companies have done exceedingly well and have outperformed the index, as well as the broader set of companies by a very far margin,” said Pradhan, adding that the valuations now has gone through the roof.

“I would think this is not something which is sustainable and at some point of time there will be a return to mean in terms of average margins,” said Pradhan.

"The FMCG space will struggle a bit from hereon and since valuations are not on their side, space does not look very attractive," said Pradhan.

According to him, "The action needs to shift to spaces like cement, infrastructure and it is a good time to build portfolios with them. Currently, the numbers do not suggest that it is an attractive space to look at but if one believes that the economy is going to turnaround then these sectors will do well in spite of a lot of challenges."

First Published:May 7, 2019 11:21 AM IST