Zerodha’s Nikhil Kamath is bullish on FMCG, restaurants, hotels and multiplexes

Zerodha and True Beacon’s co-founder Nikhil Kamath said that the current stock market movement can be seen as a bear market pullback.

“From a broader perspective, I think it would be fair to say that the issues have not gone away be it with slowing growth, be it with inflation, be it with geopolitical tensions that we have across the world. And, things like crude and, commodity prices generally being significantly higher. So, the problems which took the market down 20 per cent when they did, the problems really haven't gone away. So it would probably be fair to assume that it is a bear market pullback,” he said in an interview with Udayan Mukherjee, Global Business Editor, India Today Group and Aabha Bakaya, Senior Editor, Business Today TV.

One should not be surprised if the markets were to go down and test levels in the last correction, he added.

Talking about the Indian currency, he said, “I don't see the currency depreciation as too much of a problem. I know it looks bad when it is at 80. But I think it brings with it certain advantages and disadvantages. While we are running a trade deficit, and we're importing as much as we are, it's probably going to hurt us more in the interim.” 

“India seems to be aptly located from a geographical standpoint, to take advantage of renewables like solar, and India is gifted in so many ways when you look at it from that standpoint, I feel like if you were to take out the crude component from the deficit, and we do a bunch of different things differently and the trade deficit number goes away. I know it's going to happen in the near future, but with time, I don't think the currency will be too much of a problem,” he asserted.

On the consumption story of India as and when the growth improves, there is going to be a higher demand. Therefore, Kamath pointed few sectors that he is bullish on which include FMCG companies, multiplex chains, restaurant chains, and hotels. But, on the contrary, the one sector on which he is bearish is the real estate sector.

Expressing optimism about gold, he said that "I feel like it inherently makes a use case for gold to become more relevant,” he added. 

The Zerodha co-founder is also wary of betting on Zomato. “I would personally probably still not buy it. The path to profitability does not seem very clear. And, the acquisitions that they have done in the last one year, I don't know when the rewards of that will actually start coming through,” he added.