Mid- and small-cap correction likely over, froth cleared: HDFC Securities' Relli

In 1999-2000, the market cap of Asian Paints was ~$200m, just 2% of the largest consumer company then, Hindustan Unilever. Today Asian Paintss market cap is $35bn, more than 50% of Unilevers! Titan was a tiny cap during 2001-4 (the lowest was in 2001, a market cap of $25m, vs $40bn now!) when it entered the jewellery segment and changed the industry.

Looking ahead, the report said that Nifty50 is expected to deliver 16% earnings growth in 2024-25 and Nifty large cap 100 is expected to register similar earnings growth.

Midcaps: After dream run in midcap smallcap index during Samvat 2079 outperforming large cap index, while valuations may have become expensive and analysts now expect large caps to gain. Midcap IT stocks may still outperform large caps. Ashoka Buidcon, Colgate palmolive are amongst analyst picks.

According to Raamdeo Agrawal, Chairman of MOFSL, pure internet companies such as Zomato, Swiggy, and PolicyBazaar can become large players in terms of profit pool. Companies like Bajaj Finance, Zerodha, and Angel One, which are traditional businesses leveraging the power of technology, are also poised for accelerated growth. Another area for growth is the real estate industry, which is showing profits after years of losses.

Hexatronic is one of 55 European companies worth more than $1 billion whose value multiplied by 10 in the past decade with dividends reinvested.  | World News

​So, regardless of what happened in the past month when people got a little worried about the impact on mid and smallcap due to some notification by the industry body or by a certain other notifications, I guess on average you have a decent medium term time horizon. Things are looking fine to us, we have enough ample opportunities to invest and we are looking for ideas all across.

Porinju Veliyath suggests a strategic approach to value investing in small and midcap stocks amidst the current market correction. He emphasizes the long-term economic growth potential of India, projecting a $6-7 trillion economy by 2030. He further poitbs out that he is 100% sure it is not a repeat of 2018 which I have gone through and suffered very badly with huge underperformance to the market.

Market has a strange habit of giving surprises on both sides, moving up when no one is expecting and news is bad all around. Falling when no one is expecting it to fall and there is good news all around. So, in today’s time when there is good news all around, right from higher GDP numbers to better GST collections and on micro front companies announcing more orders and even words like expansion of capacity coming back, instead of predicting the time when there will be a correction, just be ready for it. Ready by staying with large caps and that too with sectors and stocks where some tailwinds are emerging. This is not to say that there cannot be some underperformance in large cap space, but the fact is that over the long term these large caps not only create much more wealth but in a bearish phase, they tend to protect the wealth by falling less as compared to mid and small caps.

“We are already in Q3, month one is about to get over. This year the furloughs are going to be materially higher than they have been in the past and that is largely a function of the macro stress that everyone has talked about and that we also experience on an ongoing basis.”

Customers are set to benefit from an automotive market resurgence with attractive discounts and offers in the new financial year. Despite a record volume in the current fiscal year, industry experts predict a potential slowdown in 2024-25 due to decreased demand and rising inventories. The new financial year is bring an era of attractive discounts and offers.