ETMarkets Fund Manager Talk: Divam Sharma of Green Portfolio tells why he’s bullish on these 6 mid- & smallcap names

economictimes.indiatimes.com:

MUMBAI — Green Portfolio PMS is extremely bullish on the midcap and smallcap segment and believes that their outperformance to largecaps will continue in the near term. “Despite being small and midcaps, these are fundamentally strong companies which are high on corporate governance, growth prospects and yet available at comfortable valuations,” said Divam Sharma, co-founder of the PMS and a smallcase manager. Supriya Lifesciences, Elin Electricals, Orient paper, Likhita Infra, Aarti Pharmalabs, Piramal Pharma are a few names that the PMS is inclined towards currently.

Edited excerpts from an interview with ETMarkets:Benchmark indices have rallied close to 16% in 5 months. Do you think there is more steam left in this rally?If you look at the historical data, over the last 10 years, we have seen 5 instances where benchmark indices have rallied 5 months at a stretch, while there were 2 instances of 6 months at a stretch. However, we believe that a healthy correction can come as all the positives are priced in.If we look at banking stocks, they have largely underperformed in this market rally. What’s holding back the bulls? Has your smallcase done any major rejigs in this pack?We believe they are consolidating.

Given the early rally we had seen in this sector, the stocks are weighing the negative effects of potentially lower interest rates with the positive effects of higher credit offtake. There hasn't been a major exposure to financials or banking in our smallcases.The midcap and smallcap stocks have outperformed by a wide margin in the recent months. How has this favoured your smallcase? We are focused on small and midcaps.