Page 2 - Midcap Space News Today

“We will broadly be between 18,500 and 20,200, the previous highs that we crossed. Markets are really not going anywhere in a hurry. It is going to be a pick and choose market for all that you know. But it is a very good time to create a portfolio for the medium term, post the central elections in 2024. ”

"The Indian economy is witnessing a revival in capex, which is being driven by strong government spending and private investment in key sectors such as infrastructure, capital goods, renewables, oil and gas, automobiles, and certain brownfield upgradation capex. ROEs have been remarkably resilient and improving in the BFSI segment, especially for lenders."

"In terms of sector preferences, large private banks are currently experiencing an advantage of fall in the Net Interest Margins (NIMs), although they maintain robust credit growth and stable asset quality. Most of these banks are well-capitalized, and their valuations align with historical averages. Meanwhile, the pharmaceutical sector is showing resilience with steady performance in the domestic market."

“Largecap story is back but when it comes to relative risk reward on the valuation basis, if you begin with that, then definitely it stands out because generally 60% of largecaps is about the consumption part of Indian economy through retail credit growth or through FMCG or auto OEMs, etc.”

"While Indias long-term future looks bright, the valuations are at the upper end of the range, and there is some froth in small/mid-cap stocks. So, despite being bullish on India from a long-term perspective, pure beta strategies may struggle to deliver good returns in the short term. Further, Our markets will also evolve to distinguish between sophisticated investors and retail investors."

Aequitas Investments, a small and mid-cap investor, is still finding companies in the small and midcap sector with inexpensive valuations and continues to invest in them. While there is froth in the small and mid-cap space, there are still pockets with attractive valuations. Aequitas Investments small-cap strategy has been the top performer in September, driven by long-term calls in sectors such as infrastructure and manufacturing. Thematic funds focused on Indias growth story are expected to do...

Samco Mutual Fund believes that there is still momentum in the small and midcap space despite the pace of inflows slowing down in midcap and smallcap funds. Valuations in the midcap and smallcap space are stretched, but there are still investment opportunities in niche NBFCs, specialty chemicals, auto and auto ancillaries. Thematic funds have gained traction due to geopolitical factors. Key factors to watch in Q2 earnings include IT companies that are not facing weaknesses and improvements in th...

“We see that the retail investors are reposing faith and trust in the mutual fund industry and they are using the SIP as an investment vehicle to participate in the India story and we believe that going ahead we will see the SIP numbers are going to show an increasing trend.”

“The outperformance of the mid and smallcaps has been substantial versus the Nifty 50 since May. If we are to look at our coverage of 180 to 200 stocks, we have seen our analysts downgrading almost around 16 stocks in the last two months, which is basically we have downgraded around 8% of the stocks to either hold or reduce.”

Jefferies sees an earnings revival in mid-cap firms in financial year 2024 as commodity prices turn favourable and also expects the operating margins of midcaps to rise around 90 bps YoY.