ET Intelligence Group: Investors' confidence in the consumer discretionary stocks has taken a jolt due to the cash demonetising move introduced by the Modi government. The move is likely to impact these companies' trade channels and in turn may impact the earnings of the consumer discretionary companies for at least one quarter. However, owing to the headwinds from the government's measures, premium valuations may moderate.Investors are re-assessing their outlook on the consumer discretionary stocks. As most of these firms have cash-and-carry arrangement with their distributors, a large number of distributors have to deal with their wholesalers and retailers in cash. Hence, the impact of sales loss is likely to be higher for ITC and United Spirits For spirit companies, the impact will be more likely to be seen in the premium segments which are priced higher than Rs 500.

Source: Economic Times November 14, 2016 03:10 UTC