"The recent rally in the market has led to strong inflows into midcap and smallcap funds. However, the valuation gap between largecap and midcap/smallcap stocks has narrowed. Investors looking to invest in midcap and smallcap funds should have a longer term view and manage their return expectations accordingly. Multicap funds, with balanced exposure across market caps, have the potential to deliver good risk-adjusted returns."
“I do not understand certain pockets of exuberance in smallcaps for sure. I really do not understand why people are chasing exotic fruits if you have an entire platter of apples and mangoes and whatever else you like on the platter. Why do you have to discover a new fruit that may even poison you?”
"We believe that despite the strong market performance and handsome gains in certain sections of the market, there are pockets of reasonable valuations available and would suggest long-term investors stay put and benefit from the compounding gains over the years. We have observed over several market cycles that the market tends to give outsized returns in spurts and any endeavour by a long-term investor to time the market may lead to their missing out on such possible outcomes."
"I assess equity markets with the C-F-E framework, where C stands for corporate earnings, F for flows, and E for event risks. Corporate earnings have grown well over the last two years, with Nifty 50 earnings per share rising 30% from 650 to 850. So today with Nifty 50 at around 20000 levels, we are trading at 23.5 times trailing earnings."
"India is currently in a favourable position compared to both developed and emerging nations. However, there is a possibility of FPIs selling their investments in India if there is a global risk-off situation. Despite Indias strong macroeconomic fundamentals, external factors like concerns in the US banking sector, elevated crude oil prices, high inflation, and a sustained “higher for longer” policy rate can have an impact."