Nilesh Shah, MD & CEO of Envision Capital, is of the view that non-banking finance companies (NBFCs) are still a big “avoid”.
In an interview with CNBC-TV18, Shah said there was a structural challenge with the business models of NBFCs.
“The liability side continues to be a challenge in terms of overall NBFCs,” he said.
He said they would continue to remain dependent on wholesale sources of funding.
“Apart from being some nice trading bets or tactical plays, purely from a structural investment opportunity, NBFCs can be best avoided,” he said.
On midcaps, Shah said their valuations were far more attractive than those of large caps.
“Valuations and PE (price to earnings) multiples are significantly lower than what we have seen them either during their peaks in early 2018 or even during the peak at the start of this year,” he said.
“Over the next few years, you are going to see a strong resurgence in pockets of excellence in the midcap space. Once issues around COVID and all of that are behind us, that is the space to watch out for,” he said.
In the financial space, Shah likes pockets like general insurance, life insurance, and health insurance.
Also, he is bullish on companies into kitchen appliances and home appliances . He expects pockets of health and wellness and personal care segment to be pretty strong.-Money Control