Rakshit Ranjan, Portfolio Manager of Marcellus Investment Managers, in an interview with CNBC-TV18 said he is quite convinced about the ability of ITC to grow and give good returns.
”We have held ITC in our portfolio for a few years before July 2020 and we are still quite convinced about the ability of this firm to keep nurturing the cash cow, which is cigarettes and keep growing earnings from there in lower double digits on a very sustainable and consistent basis over the longer-term,” said Ranjan.
He also discussed fundamentals of the market.
He has added HDFC Life in its portfolio knocking out ITC, he said. Ranjan explained the reason behind addition of HDFC Life to their portfolio, “The more important factor which led to ITC exiting was that HDFC Life was the stock which we have been researching on for more than a year now and once we got convinced, the call was a choice between adding HDFC Life as the 14th stock in the portfolio versus replacing the lowest allocation in our existing portfolio at that time with HDFC Life and maintaining the 13 stock concentration. We decided to go with the latter.”
Some of the strongest companies in the country have benefited massively over the last four-five months because many of their competitors have not been able to get back on their feet on time or in a normal enough manner, he said.
Revenue growth for most non-financial companies has recovered to positive over last 4 months and sustained recovery for most companies rule out risk of temporary pent-up demand, he added.
Revenue growth is reflective of market share gains rather than overall industry growth, he pointed out.
Growth momentum is likely to improve further in remainder of FY21 and market share gains accelerate as broader economic activity normalises, Ranjan explained.