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Porinju Veliyath says worst over for market, time to pick good quality small and midcap stocks

Updated : October 11, 2018 07:00 AM IST

The market has already seen extreme panic and pessimism and the worst is over for them,” said Porinju Veliyath, MD and portfolio manager, Equity Intelligence India, adding that it is a rare opportunity to pick good quality small and midcap stocks.

“It is reasonable to think that all the macro negatives are already known to the market and we have already seen extreme panic and pessimism," Veliyath told CNBC-TV8.

Especially for the small and midcaps the correction is overdone and after 12 months the investment quality stocks among the mid and small caps will be significantly higher, he added.

All the negative news are already priced-in, so feel bullish on the markets now for stock picking, Veliyath said.

"For the last 15 years, I have been investing in small and midcap stocks in portfolio management services (PMS)," he said. "So, when things go bad, when sharp correction happens, a drawdown in client accounts are sharp but not overly worried about it."

He is also of the view that the Re 1 per litre burden on oil marketing companies was not a prudent move by the government.

When asked about the correction in index stocks and chances of buying them, Veliyath said he doesn’t feel the excitement in index stocks and it is still at 24-25 PE (price-to-earnings).

On nonbanking financial companies (NBFC), Veliath said he would like to ignore them at this point in time.
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