IDFC Securities on Wednesday said NBFC (non-banking finance companies) liquidity crisis may happen in high growth environment also.
In an interview to CNBC-TV18, Anish Damania, chief executive officer, and head-institutional equity, said, "Once the dust settles down, there could be a de-rating of these NBFCs that were flying high on valuations."
However, few announcements from the government has also helped to ease negative sentiment in financial systems and market, Damania said, "Going forward, one will have to be very stock specific with an eye on what is happening with earnings."
On portfolio positioning, Damania said, "Within IT, one needs to stay with largecaps like Infosys and TCS. The stocks have already corrected significantly from their highs. Earnings trajectory for them look good aided by depreciating rupee. However, avoid midcaps in that space."
He said investors can selectively look at pharma space, "Aurobindo Pharma looks decent."
IDFC Securities has a mixed approach with regards to the consumer space, said Damania, adding that they like Asian Paints and is positive on Colgate Palmolive.
"However, would be careful of those stocks, where the base effect of the Q3-Q4 was strong last year and therefore, the relative growth in Q3-Q4 this fiscal would be weak as compared to first half. Would be cautious on these kind of stocks,” he added.
The house is also upbeat on Reliance Industries Ltd, but is neutral on Larsen and Toubro because of stretched valuations.Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.