Here's what Basant Maheshwari forecast on NBFCs

Basant Maheshwari of Basant Maheshwari Wealth told CNBC-TV18, "Valuations don’t drop unless the earnings drop. As long as the growth is there, growth is like music and valuations are the chairs. So, you don’t have to sit on the chair unless the music stops. So, if the growth stops then you have to look for a chair to sit. So, for the moment growth would be there."

"If you analyse any NBFC, any bank, you have to look at it this way – as long as the growth is there, the management is telling you we don’t have an asset quality problem. However the moment there is an asset quality problem managements would know about it 3-6 quarters in advance. What they do is they cut down the growth. So, a company growing at 40 percent would suddenly grow at 20-25 percent because at that point they would be worrying about recovering the money."

"So, the moment the growth falters the management is indirectly telling you, we are not too sure about the asset quality. So, I am waiting for that, that doesn’t seem to be coming around anytime soon. Whether they are doing housing loan or construction finance, bottom-line is if they have managed to keep their asset quality in order, their net NPA at around 0.25 or thereabouts, I think it is all fine."

"For example, we have a holding Bajaj Finance but not a recommendation, I heard they are funding for root canals. So, if you default you don’t expect somebody to come and extract the tooth back and take it. So, it is all like that and that is how it is supposed to be. Bull markets are supposed to be frothy. If there is no froth there is no bull market. You got to be crazy, you got to be paying top dollar, somebody has to get foolish, somebody has to sell his wife’s bangles to put money into stocks, all that happens and maybe we will be a part of it in some way or the other," he said.