ETMarkets Fund Manager Talk: This PMS fund manager sees mid, smallcap stocks driving consistent alpha returns

economictimes.indiatimes.com:

Midcap and smallcap stocks have registered strong gains in the recent months and outperformed their largecap peers. Torus Oro Portfolio Management Ltd believes that this segment of the market can drive consistent alpha generation for investors. “The mid and smallcap space provides ample opportunities to invest in businesses having great growth prospects, product differentiation, and improving business economics,” said Nitin Agrawal, CEO of the portfolio management firm. Agrawal, however, said it was important to keep in mind the underlying risk and fundamentals in check. Edited excerpts:Benchmark indices have rallied close to 16% in 5 months. How comfortable are you with the current valuations?India’s growth story has picked up momentum over the last few months, leading benchmark indices to lifetime highs. Despite the weak global macro factors, the Indian economy witnessed rising growth momentum, moderation in inflation and better trade balance. Further, Indian companies reported strong revenue growth and improvement in margins. This led to increased allocation from FIIs and, thus, India witnessed strong fund inflows over the last few months. Even at the current levels and based on expected EPS growth, we believe that the Indian market is fairly valued. We are comfortable with valuations from a long-term horizon perspective.

ETMarkets Smart Talk: India remains a relative oasis of growth among the larger G20 economies: Sanjay Chawla

We believe that in the absence of any major global events, Indian companies will deliver strongly on growth along with improving profitability, justifying the valuation at which the benchmarks are trading.Multicap funds have caught the limelight recently. Could you share the