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Despite the correction, valuations at headline levels still not cheap: Nilesh Shah of Envision Capital

Nilesh Shah, MD & CEO of Envision Capital, spoke to CNBC-TV18 about the current trends in the equity market and valuations.

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By Anuj Singhal   | Latha Venkatesh   | Reema Tendulkar  October 9, 2018, 11:44:58 AM IST (Published)

Nilesh Shah, MD & CEO of Envision Capital, spoke to CNBC-TV18 about the current trends in the equity market and valuations.



“This is probably the most ferocious and longest period of correction that we have seen over the last 4-5 years. So we still remain in a strong bull market but the correction could be longer than we anticipated because of global headwinds," said Shah,

"However, it is not yet the time for going out with your shopping back because although one has seen a huge price correction, valuations at headline levels are still not cheap," said Shah, adding that they are holding on to a fair bit of liquidity.

“We have still not got on to a stage where long term averages in terms of valuations where they are – especially in an environment where interest rates, yields are going up. In that kind of environment there is still case for valuations to compress a bit more than what we are seeing right now,” he said.

According to Shah, there are some spaces where the valuation and price correction has been huge and where long-term fundamentals are strong.

"The paralysis currently seen with regards to lending to NBFCs is unlikely to last for too long. The regulators would take a lot of measures to ensure debt markets do not freeze. However, NBFCs are still not a buy at current levels," Shah said.

The house is very upbeat on the insurance space post the correction.

"The growth opportunity for the sector is huge and so the current price correction is a chance to buy them for the long-term," said Shah.



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