Time To Selectively Buy Into Small, Mid-Cap Stocks, Says Mahesh Patil

The recent correction has created selective buying opportunities in the broader market, according to Mahesh Patil of Aditya Birla Sun Life Mutual Fund.

Small- and mid-cap stocks had seen a rally in the last two to three years and valuations rose, Patil, co-chief investment officer at the fund house, told BloombergQuint in an interview. “Many mid caps now are at valuations which are attractive from a long-term perspective,” he said.

Here are some other key highlights from the conversation:

• Stocks that are performing are those which have earnings visibility and growth.
• Good time to build allocation into stocks which have underperformed.
• PSU banking not attractive from a long-term perspective; bad loan issue likely to have peaked out.
• Overall credit growth among public sector banks likely to be fairly muted; private banks will continue to gain market share.
• Oil marketing companies likely to maintain margins; valuations for oil refining cum marketing companies attractive compared to upstream companies.