Midcap consumption cos hope for second half turnaround: UBS

Consumption oriented companies are hoping for better times in the second half of the financial year on factors including increased election spending and new product initiatives according to International brokerage UBS, which hosted its third India Mid-Cap Conference,

“Consumer facing companies continued to indicate still slowing demand, yet exuded hope of recovery in 2HFY14. This is premised on low base for some, specific product initiatives for some and finally hopes of macro recovery as preelection spend kicks in,” said the India Market Strategy report from UBS Securities India dated 11th June 2013.

UBS noted that midcap companies remained positive on their ability to hold their own against rivals and continue to grow despite a weak macro economic situation-although the growth may be slower than before.

“…almost all remained confident on their own competitive positioning and thus ability to grow, albeit slower than past, despite weak macro,” said the report authored by analysts Gautam Chhaochharia, Nupur Agarwal and Ruchi Vora.

Meanwhile, the investors who came to the conference, which hosted  31 companies, sought to find ideas to beat the market although they did not seem convinced of any major market recovery, said the report.

Industrial companies were not too bullish on their prospects. However, companies oriented towards the agriculture segment were hopeful of a bounceback with normal monsoons being forecast after a bad year in 2012.

Mid-cap stocks have underperformed in 2013, with the midcap index falling over 13% compared to a 1.28% drop in the Sensex.