Manish Sonthalia, head of Equity Portfolio Management Services at Motilal Oswal AMC, on Wednesday said that every stock is worth buying in the auto sector and added that there seems to be over-pessimism for the space.
"The major concerns for the space have been liquidity and sales... if the demand does not move up, then the government will likely come out with some incentives to propel demand in the sector," said Sonthalia.
According to him, consumption is a theme that one cannot overlook.
Talking about jewellery, he said Titan is a stock that may grow at 20 percent CAGR for many years.
On air conditioner companies, he said, "South-based companies like Blue Star may look at 20 percent growth while north-based companies in volume terms may look at 10 percent growth."
When asked about the problems in the financial space and in stocks like Yes Bank and Indiabulls Housing, he said that there is an asset-liability mismatch. "If one were to liquidate these companies, there would be a gap between total assets and liabilities, that is what the markets are factoring in but it won’t become a contagion issue," said Sonthalia.
According to him, power sector is "in a big mess". "The problem is not on the generation side but more on the discom side – the offtake of power, transmission, and distribution. The financials of discoms are bad and there is a funding gap," he said, adding that there is no clarity on how the power situation will get solved. "The solution should be a permanent one."