ETMarkets Smart Talk: Small & Midcaps in bear market! Rajkumar Singhal shares 4 key stock-picking criteria
“Small and midcaps have been hit hard—Nifty Smallcap 100 is down 21%, valuations remain above long-term averages, and earnings disappointments have led to downgrades,” says Rajkumar Singhal, CEO, Quest Investment Advisors.
In an interview with ETMarkets, Singhal said: “With earnings likely to recover in CY25, the pain in small and midcaps may ease. A selective bottom-up approach is key—focus on quality businesses with strong balance sheets and sustainable growth,” Edited excerpts:
Thanks for taking the time. February was highly volatile amid trade war fears and FII selling. What are your views?
Trade war concerns have persisted since President Trump’s election, but the recent market weakness is largely domestic.
Overvaluation, especially in mid and small caps, and weak corporate earnings have weighed on sentiment. A slowdown in rural and urban consumption, along with tightening credit, has added to the pressure.
Since peaking on Sept 24, Nifty50, Midcap, and Small Cap indices have corrected 14%, 18%, and 21%, respectively, with FIIs selling $37 billion.
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