According to Abneesh Roy, Executive Director at Nuvama Institutional Equities, investors looking at India's consumer sector may find better opportunities in liquor companies than cigarette makers. Roy's highest-conviction idea is the alcoholic beverages space, driven by the possibility of major reforms in Tamil Nadu, where state-run liquor retailer Tamil Nadu State Marketing Corporation Limited (TASMAC) could be privatised. As reported by CNBC TV18, Roy said "We like the alcobev space because Tamil Nadu clearly big reforms are likely. TASMAC is likely to get privatised, and it's a very big market." Among listed companies, he prefers United Spirits, Radico Khaitan and Allied Blenders and Distillers, with United Spirits offering additional valuation comfort through potential 10% dividend yield linked to the Indian Premier League team sale. Roy noted that while he believes the worst is over for cigarette companies, he expects another weak quarter with "Even in Q2, there will be a decline in terms of volumes and profit."
Roy remains positive on Marico after the fast-moving consumer goods company's strong April-June quarter of 2026 performance. According to CNBC TV18, Marico's earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 25%, the highest in seven years, while India volumes remained in double digits. Roy noted that although he does not expect Parachute's 10% volume growth to become the norm, he believes high single-digit growth is sustainable. Roy acknowledged that Marico's valuation looks expensive after the stock's strong run but said quality companies often command premium valuations. "Marico will be one of those," he said, grouping it with companies such as Pidilite Industries, Nestle India, Asian Paints and Radico that have consistently delivered superior growth. Other businesses including Safola Foods, premium personal care and digital brands continue to perform well.
Roy is optimistic on FSN E-Commerce Ventures (Nykaa), with the company's fashion business being the biggest positive surprise in the quarter. As reported by CNBC TV18, Nykaa's fashion EBITDA jumped 68%, while fashion net sales value (NSV) grew 53%, complementing continued strength in the beauty business which expanded 29%. Nuvama has slightly raised its earnings estimates, maintains a Buy rating and has a target price of ₹414. Roy said Nykaa should be valued using a sum-of-the-parts approach because it operates both high-growth and mature businesses. "I think nothing to worry. I think these are healthy corrections which keep happening in expensive stocks," Roy said, referring to recent stock corrections.
On Nestle India, Roy believes investors overreacted to management's comments at the company's analyst meeting. According to CNBC TV18, he expects Nestle to deliver around 20% revenue growth in the July-September quarter of 2026 (Q2FY27) before growth normalises to 10-12% from the October-December quarter of 2026 (Q3FY27). Roy pointed to long-term opportunities in chocolates, prepared dishes and pet food, saying the recent decline should be viewed as a buying opportunity rather than a negative turning point for the company. He expects the stock corrections to be healthy adjustments for expensive stocks, with little reason for concern about the company's fundamentals.
