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While money managers have sounded out a word of caution, stating that risk-reward remains unfavourable in several pockets of the smallcap segment, an analysis of the valuation based on the price-to-earnings ratio (P/E), suggested that there are still some multibaggers which are trading below their 5-year average.
“ I continue to think local domestic money that is coming in mid and smallcaps will continue to fuel, it if it has to keep going ahead. From January onwards, results will show us how good the Diwali season is and if Diwali was really good in terms of earnings, we should see the consumer durables or the staple sector start to take more weight in the movements going forward.”
“If the spending on elections allows the two-wheeler segment to revive, all the three large two-wheeler companies, and then Eicher, which is relatively more niche, will see some kind of uptick in terms of sales. The stock prices have already started to go up so maybe people know much more than what I am talking about.”
“The lack of ability of the smaller participants to be able to raise capital at reasonable rates will push more money towards the larger NBFCs and to some of the banks as well. So while I say this, nobody knows what will happen. If worldwide there is a crisis, then most of this analysis can kind of go for a toss.”
“Probably shoes are better than real estate; but to be fair, there is visibility in the shoes and consumer demand sector and there are a lot more brands. In real estate, in the near term, we will see a lot more. We will see a lot of activity and the way the accounting goes, the results for real estate companies will probably be good for next year.”