ETMarkets Investors’ Guide: Should one go with the wind in this market? – Economic Times

Hi there, this is ETMarkets’ Investors Guide, a show about asset classes, market trends and investment opportunities. I am Saloni Goel.

Shares of multinational companies have fared better than the benchmark equity indices on Dalal Street over the past one year. Nifty MNC index has declined less than 1 per cent since June 2019 while NSE Nifty is down 14 per cent for the same period.

A couple of MNC stocks like Abbott India, Sanofi India, Nestle India, Whirlpool and Britannia Industries have rallied between 18 per cent and 90 per cent in this period. Even on a year-to-date basis, the MNC index has declined far less at 7.50 per cent against a 17 per cent value erosion in Nifty50.

Are these stocks proving to be safe haven for equity investor in this market? Is it the right time to invest in MNC stocks? What are the things one needs to keep in mind while investing in these names?

We caught up with Mayur Shah, PMS Fund Manager at Anand Rathi Advisors, to seeks answer to these questions.

Welcome to the show, Mr Shah

Why should an investor look at MNC stocks? What are the moats that they provide to separate them from their domestic peers?
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While MNC stocks have proven to be safe bets in volatile times, the problem is most of them are very expensive, compared to even their parents. Companies like GSK, 3M, Nestle, P&G, HUL, USL trade at 60-215 times their earnings. How does one justify such lofty valuations for Indian
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