ETMarkets Fund Manager Talk-Despite frothy valuation, exciting themes available in mid/smallcap segments: Mihir Vora, Max Life Insurance

economictimes.indiatimes.com:

MUMBAI — Eventhough valuations in the midcap and smallcap segments look a bit frothy, interesting themes to play on are only here given the large number of stocks available, believes Mihir Vora, Chief Investment Officer, Max Life Insurance. “While the space is small in terms of market capitalization, it is large in terms of the number of stocks,” Vora said. Some of the themes he likes in the midcap and smallcap segments are speciality chemicals, defence, railways, transmission and distribution, irrigation, logistics etc.

Edited excerpts from an interview with ETMarkets:Although our markets have hit record highs, on a YTD basis, India has still underperformed its EM and DM peers. Do you see scope for a trend reversal?India has had a stellar run versus emerging markets since 2020 and the outperformance was huge. With China providing some hope, there was some rotation towards China in the early part of 2023, which proved short-lived.

However, the good performance of the past few months means that India is back among the top performers on a 1-year basis. India trades at a premium to other emerging markets and we believe that this is justified given the good earnings growth outlook and strong macroeconomic situation for the country.FPIs have been on a buying spree in India. Do you see this sustaining and what are the factors that will drive it?India offers a structurally higher growth rate compared to developed markets and most emerging markets.

Our position as the fastest growing large economy will sustain for a long time. The hawkish stance of central banks and the US dollar strength are likely to start reversing in the next few quarters, which will increase flows to markets like India. Moreover, with China increasingly