One of the biggest challenges which companies face is the right allocation of capital. Over a long term it is the right allocation of capital which determines whether a business is able to create shareholder returns or not. This becomes even more pronounced in the case of the mid-cap companies where resources are even more limited. When looking at mid-cap companies, look carefully at PEG ratio which in the long-term indicates many things in a better manner than most other alternatives like PE which tend to create a mirage of value.
Amit Gupta says: "Energy transition, Make in India and capex would be the key themes, going forward. Over FY22-23, the capex cycle was primarily driven by household investments in real estate and the central government. Consequently, all the engines of the capex cycle have now started to fire (centre, state, corporates and households)."
Sridhar Sivaram says: “EMS as a space, whether it is China/Europe plus one or not, is going to boom anyway, because the electronic component in our daily lives is significantly going up. Having said that these stocks have rallied a lot, their earnings will also grow; it may not be structural, but it may not be like every quarter it will grow. So you will see surprises here. Those are the opportunities to buy.”