Stock Market Strategy – Midcaps Hit A Home Run: Motilal Oswal

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The outperformance of mid-cap and small-cap indices have gone past their earlier benchmarks on multiple fronts – consecutive months of positive returns, 12-month rolling returns gap versus the Nifty, relative valuations, and contribution to overall market capitalisation.

There exists a sharp divergence in valuations within these indices, with the gap between the top and bottom quintile expanding.

While the mid-cap/small-cap valuations are rich and no longer lucrative on the risk-reward metric, the gradual unlocking of the economy and improved demand backdrop still offer bottom-up opportunities. Consistent earnings delivery versus expectations is critical for further outperformance in our view.

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Motilal Oswal India Strategy July 6.pdf


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