A $13-billion fund manager bets on unloved India's consumer stocks

Companies that sell everything from grains to beverages to detergents, have lost their shine on stock market as a cash squeeze caused by the crisis in some finance firms hurt demand even for staples

Flagging Indian sales of products like toothpaste and hair oil have been a drag on the share prices of the nation’s consumer goods makers, but each dip is a buying opportunity for a fund manager who sees the slowdown in demand as temporary.

“The stocks offer stability and steady growth,” said Mahesh Patil, co-chief investment officer at Aditya Birla Sunlife Mutual Fund, which oversees assets of about $13 billion. “We don’t expect valuations to correct too much for consumer companies. They may consolidate a bit, but in a correction, we would look at them.”

Companies such as ITC, Hindustan Unilever and Marico,