The valuations of consumer durables and the auto sector is rich, which there is immense value in the cement sector led by its secular structural story, believes Sunil Subramaniam, MD & CEO of Sundaram Mutual Fund.
Speaking in an interview with CNBC-TV18, he said, “Consumer durables and autos are where the valuations are on the healthier or richer side. The value is in the Indian old economy stuff and in the services area where the new economy initial public offerings (IPOs) are coming.”
“Consumer discretionary and auto where the valuations are full because there was a sharp rise in their prices in the expectation of a big summer month and growth, but the second wave came at the wrong time for them. Therefore, a bit of correction is expected and these are the sectors where imported oil and import cost also likely to impact margins,” said Subramaniam.
On cement, he said, “Cement is a very regional play and we believe there is immense value in cement because it’s a secular structural story as housing is another soft interest rate-driven long-term growth prospect. So cement is a key factor in housing too. Therefore, it’s a strong buy.”
For the entire interview, watch the video