A man feed birds as they fly by a creek. (Photographer: Asim Hafeez/Bloomberg)

This Is The Time For Vulture Investing, Says Manish Sonthalia

The current nervousness in the market is a great opportunity for vulture investing, said Manish Sonthalia of Motilal Oswal Asset Management Company.

“There is a financial distrust in the system which is leading to all-round selling,” Sonthalia, head of equities-portfolio management services at the asset manager, said, adding that this is the best time for investors with huge cash piles to buy franchises at “ridiculously low” valuations.

Markets are determined by sentiments in the short term and they present a very good buying opportunity, he said.

Sure-Shot Winner Stocks

Stocks that are trading at less than one-time price-to-earnings growth are sure-shot winners, according to Sonthalia, if investors have a three-year time horizon. “These are disruptive times,” he said, adding that when the dust settles, the stocks wouldn’t trade at such valuations.

In the medium to long term, everything would be weighed according to the fair value of the companies, he said.

You don’t know from where the capital is going to come to adequately price them, but it will happen. That’s what capitalism is all about.
Manish Sonthalia, Head of Equities-PMS, Motilal Oswal Asset Management Company

Key Highlights:

  • Earnings growth is going to be nil in this quarter, except for banks.
  • Consumption pocket has high quality franchises.
  • Consumption stocks to trade higher than other sectors.
  • Everything in Indian equities is priced to perfection for the next two years.
  • Broader markets to perform much better than the index post election results.
  • Reliance to be the biggest wealth creator in Indian history, if there is convergence of telecom, media and technology.