Avendus Capital Alternate Strategies on Tuesday said investors must be very selective with midcap opportunities.

Speaking to CNBC-TV18, Vaibhav Sanghavi, co-Chief Executive Officer, said, "Going forward, one needs to be very selective in terms of getting midcap opportunities.”

"Midcaps have been pretty choppy in last one and one and half months. We are not seeing that on the benchmark index, I mean in the sense that, Nifty has been pretty buoyant and clearly it look like the pain trade is probably up, while the broader market is pretty dampened," Sanghavi said.

“Basically in the last quarter, we are witnessing some amount of margin pressures because of the increase in commodity cost. While the overall midcap space is trading pretty rich, once you see some amount of margin pressures, is where people or investors get a little cautious about," he further added.