While the steep correction seen in small and midcap stocks has taken even a few top market voices by surprise including ace investor Porinju Veliyath, Kotak AMCs Harsha Upadhyaya says that the space could see more correction. In an interview to ET Now, Harsha Upadhyaya said that given the vast outperformance of small and midcap stocks in 2017, the space was bound to remain volatile in the current year. Observing that the stock markets overall are trading above the historical levels, he said that a timewise or a value wise correction could happen in large cap stocks. \u201cWe think at least in large caps, it would be more of a timewise correction. It has already happened for last two-three quarters and could continue for some more quarters. But in mid and small caps, where you do not get comfort of earnings growth if the valuations are high, than those stocks can really correct very sharply,\u201d he told the channel. Notably, the value erosion seen in the current calendar year has \u2018baffled\u2019 even investor Porinju Veliyath. \u201cWe are going through a underperformance in PMS since January this year. An unusual sell-off in mid and small cap stocks is going on leading to irrational pricing of many of our portfolio stocks,\u201d ace investor CEO of Equity Intelligence, Porinju Veliyath wrote in a letter to investors last week. \u201cTo be very frank, I\u2019m a little baffled this time looking at the extent of erosion in portfolio value in such a short period,\u201d he added. However, he \u00a0expects a significant bounce back in value stocks. \u201cWe will do some re-structuring, as required in a more rational market,\u201d he wrote in the note. According to Upadhyaya, the consumption theme is slated to witness strong growth. \u201cGrowth continues to be very strong for most of the consumption elements - whether it is discretionary or non-discretionary. Our results are also in line with expectation in most of the cases but the worry there is of the valuations because this is one pocket where earnings have been steady for last couple of years and hence more money has gone into this particular pocket,\u201d he noted, adding that consumption is one area where the latest quarterly results have been either in line or slightly better than expectations and some of the retail private sector banks have also been good in terms of earnings growth.