Renaissance Investment prefers consumer discretionary, wary of 'crowded' QSR space

Renaissance Investment Managers is overweight on the consumer discretionary sector, with a particular focus on select niches within this segment, such as apparel, footwear, and jewellery. However, the investment firm remains cautious about the quick-service restaurant (QSR) space.

In an interview with CNBC-TV18, Pawan Parakh of Renaissance Investment Managers explained the rationale behind their stance on QSR.

He said QSR is a highly crowded market with seemingly high gross margins. However, at the net level, it is an intensely competitive business with a plethora of players. Moreover, valuations within the QSR sector remain notably high. "As a result, Renaissance has opted to steer clear of the QSR space for the past three years and intends to maintain this position in its portfolio," he said.