Manish Sonthalia of Motilal Oswal AMC told CNBC-TV18, "ITC and Asian Paints are at very stretched valuations undoubtedly. At Rs 50000 crore market cap for Asian Paints roughly around USD 9 billion, I am not so sure whether the total paints sold in India is worth USD 9 billion. Single company having that sort of a market cap is stretched but that is not to take away the franchise value out of Asian Paints. If you have slightly longer view point in terms of your holding period you can very well buy into Asian Paints but I would not look at Asian Paints currently just because of sheer valuations."
He further added, "In ITC what was expected to be an 18 percent growth has now come down to 14-15 percent growth. We have seen decline in volumes for this quarter. Decline in volumes is to the extent of 5-6 percent, which is not good for a company like ITC and I don’t think with this sort of a volume decline you will see the stock price sustain at current levels. So, according to me both these stocks are worthwhile avoiding currently."
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