Key Points
Porinju Veliyath, Equity Intelligence, says the correction and consolidation is an excellent opportunity for investors to do value investing, cherry picking the stocks or doing bargain hunting in some of those small and midcaps going forward..
Everybody is curious to know whether the party in mid and smallcap stocks is over and is this like 2018 because the selling in the last couple of days is a scary reminder of what happened five-six years ago?..
So, that was almost sure kind of thing, but because of the technical factors of too much money flowing into the market, too many companies were trying to raise funds by QIP, and a lot of stocks were being managed by some investors or maybe some small operators...
Two years ago in early 2022, it was around the price earning multiples for both smallcap and midcap was 26 and surprisingly, the earnings of these companies in the indices, have gone up by something like 60-65% in the two years, which is very unusual and the outlook is also equally good and promising...
There is a macro tailwind with the economic growth projected and things happening on ground in terms of manufacturing, or Make in India theme or railways or every segment of the economy is booming and it looks like it has just began, it is not at the peak of growth if you take in railway, in aerospace, or in defence manufacturing or in generally the Make in India theme, it is only at the beginning of that growth period...
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