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Vipul Prasad says: “ It is not stretched at all for Nifty 50, so that is the point here and that is why we are saying that there is no point in trying to act smart and trying to outpace the market. Just stay invested and this is what we are doing. We are fully invested.”
Ashi Anand says: “Timing when the markets will turn and when largecaps will start delivering more than small and mid, is very difficult. But the danger with investing in smallcaps at this point in time is that when markets turn, what you have seen historically is that when small caps fall, they can fall very, very sharply and at very low liquidity. So you may not be able to get out.”
"Unpopular, unloved, and unacknowledged entities have surprisingly performed well, which is a typical characteristic of a new bull market. In order to witness new leadership, it is necessary for it to emerge from extreme unpopularity. This phenomenon has been observed time and again. However, caution must be exercised in the SME and option segments, as there might be a potential bubble forming."
"Equity as an asset class is only gaining more acceptability with domestic investors which is visible from the continuously increasing SIPs with mutual funds. Even at this, it still makes up to about a mere 4.8% of Indian household savings – which is substantially lower than its global peers. As the GenZ comes into the mainstream, we expect this number to only get better, leading to a much stronger and continued domestic flows."
Valuations in Indian largecaps are reasonable and we expect 15% or more earnings growth in the next couple of years. Sectors and sub-sectors like capital goods, defence, railways capex, electronics and durable manufacturing, construction, renewable power, power transmission & distribution, China-plus-one theme plays, beneficiaries of the production-linked schemes, chemical and pharma companies etc. are mostly represented only in the mid and smallcap space.