Diwali 2023: New growth cycle on horizon for small, midcaps, says Amar Ambani of Yes Securities, lists out 5 stock picks

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Also Read: Diwali 2023: What is ‘samvat’ and why does it hold significance for stock market investors? These results can be attributed to increased efficiencies, a decrease in commodity prices, and a steady demand environment. “The combination of stable yields and the Indian Rupee (INR), along with limited investment opportunities in sluggish markets like China, is anticipated to channel Foreign Portfolio Investment (FPI) into the Indian market," Ambani said in a note.

A range of positive factors, including sustained government capital expenditure (capex), consistent private consumption driven by robust credit demand, and substantial growth in corporate earnings due to enhanced margins resulting from lower input costs and strong banking sector performance, underpin the bullish outlook for the Sensex, he added. Also Read: Diwali 2023 Stock Picks: Reliance, HDFC Bank, ZEE among top 10 buys from Geojit Financial Services Ambani believes a new growth cycle is on the horizon for smallcap and midcap segments and expects these segments to outperform the broader market in the coming years.

“Many of the stocks within this space hold leadership positions in their respective sub-segments, boasting extensive and visible track records. This positioning aligns them to benefit from the ongoing formalization and digitalization of the economy, cost advantages stemming from lower input expenses, improved access to credit at favourable terms, and expanding valuation multiples," he said.

However, he is of the view that in the near term, it is crucial to monitor unfolding macroeconomic conditions globally. (Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial