Manish Sonthalia, senior VP and head of equities at Motilal Oswal Asset Management Company, is of the view that the quantum of fall in midcap and smallcaps is more due to panic selling by retail HNI investors but for long-term investors, this is a great time.
"The panic could be on back of the rupee depreciation but the fundamentals are still supportive of valuations at these levels," Sonthalia told CNBC-TV18 on Wednesday.
"Consumption still remains a long-term positive theme. The earnings growth for some of these companies has been very good, so one can bet on the companies that they have comfort in. The house is very positive on organised retail space – be it grocery retailing, single-brand retailing, footwear retailing, multi-brand, jewellery retailing etc within consumption," he said.
According to Sonthalia, there is too much hype about consumption names being overvalued. "A serious shift out of consumption will happen only when capex cycle starts to pick up."
He said oil marketing companies do offer great value but regulations for public companies remains a cause of concern.
According to Sonthalia, "The government is doing the right thing by not cutting excise duty because for them balancing the fiscal math is a challenge."
With regards to Reliance Industries, he said, "It is a in a sweet spot because retail is firing on all cylinders but one is not sure of how much money is going into the telecom business."
"Holding cash in a falling market is a good idea but it may not be the right strategy because the fundamentals are still in place for the stocks you want to own," said Sonthalia.
Disclaimer: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.