As most mid and smallcap stocks lack value, as they have witnessed significant re-rating in multiples without a strong underlying business model or competitive advantage.Therefore, it may be wise to re-evaluate investments in this space and consider shifting focus towards large-cap stocks, which have the potential to deliver stronger performance in the coming year.
"The valuations in the midcaps and smallcaps are not yet very cheap. One must be very selective and have a bottom-up approach while investing in this space. The major trends that are likely to play out strongly for India are in the mid and smallcap space and hence they still have the maximum potential. FIIs are also increasing their stock coverage in this space, adding more depth to the markets. So, one should be cautiously optimistic."
We believe in a long-term approach to investing and accordingly hold selected positions in companies we believe will grow over a longer period of time. The mid and smallcap segments are well represented by the investment and exports sector, which includes chemicals, auto ancillary and manufacturing while the consumption theme has a broader representation in the large cap space.
We believe in a long-term approach to investing and accordingly hold selected positions in companies we believe will grow over a longer period of time. The mid and smallcap segments are well represented by the investment and exports sector, which includes chemicals, auto ancillary and manufacturing while the consumption theme has a broader representation in the large cap space.