Manish Sonthalia of Motilal Oswal AMC feels the cash is a good idea when the market is falling but holding cash is not the right strategy. "When fundamentals are in place, it is a great time to buy."
The market has been in a consolidation mode for the last couple of weeks with the Nifty falling more than 450 points from record high levels to trade around 11,300.
The fall has also been seen in broader space and across sectors, barring IT, which has benefited from currency fall. The Indian rupee has corrected more than 13 percent year-to-date to trade near 73 a dollar.
"If we look at behavioural pattern of market, sooner or later, the market may be bottomed out soon. Yes sentiment in emerging market currencies is weak, so some panic is there but fundamentals are quite supportive," Manish Sonthalia, Director & CIO - India Zen Fund and Head - Equities PMS, Motilal Oswal AMC told Moneycontrol.
He said, "I would tend to believe that this is the great level to buy for long-term investors."
He feels the cash is a good idea when the market is falling but holding cash is not the right strategy. "When fundamentals are in place, it is a great time to buy."
When the 10-year government bond yield is above 8 percent, then PE multiple will definitely correct across the market, he said.
FMCG space or other consumption based stocks had rallied smartly followed by correction for more than a week on valuation concerns.
He said people have been making hype of overvaluations. "There will be a shift out of consumption theme. Investment capex cycle has not picked up yet and that is why there is high valuations in the consumption space."
Motilal Oswal sees earnings growth of 20 percent in FY19.
"I have been very positive on organised retail space, whether it is single retail, luggage, multibrand retail like Phoenix Mills, jewellery retailing like Titan Company etc. One can bet on his or her own comfort related to management but this is the space to be in," Sonthalia said.
OMCs and Reliance
He said people have made money in HPCL when the stock was at Rs 500 level and now the Rs 250 level can also be a great value but the call is depend upon person to person.
There has been demand from opposition parties for cut in excise duty on oil prices or reduce petrol/diesel prices which have been at record high levels.
He believes the government is doing right thing by not cutting excise duty as fiscal map is out of their control. "If excise duty cuts then there will be bigger problem for government."
Look at Bharat Electronics, where there is likely policy change which would affect their margin and which would definitely hit investors' sentiment, he said.
He feels Reliance Industries is in a sweet spot, retail business is firing on all cylinders but telecom business needs to be seen carefully.Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.