In last 10-15 years, it has paid to buy the dips and invest for the long term: Gautam Duggad

economictimes.indiatimes.com:

Gautam Duggad, Head Of Research — Institutional Equities, Motilal Oswal Financial Services, says that while valuations are expensive for mid and smallcaps, it is not correct to say that the entire mid and smallcap basket is frothy. The midcap index right now is trading at around 30% premium to Nifty. Nifty is trading at close to 19-19.5 times one year forward now and midcap index is trading at somewhere about 27 times which obviously is very expensive. Smallcaps are also trading at expensive valuation at an index level. Versus Nifty, on a 10-year basis, the long-period discount for smallcaps is 24%. Today it is trading at a 10% premium to largecap.
Duggad also says the market has respected the underlying earnings growth. When earnings were tepid for 10 years between FY10 and FY20, the market was also tepid. In last four years, earnings have done well, so markets have also done well.

You have a very wide universe of stocks which you track among all the brokerages and it is only becoming wider. A lot of midcap and smallcap stocks are represented in your universe. The entire argument that smallcap, midcap rally so far was not broadly justified and there was frothy valuations and earnings. What is the reality of the earnings? What part of the smallcap, midcaps are showing strength in earnings and which part is actually falling back?
Gautam Duggad: It is always very simplistic to paint the market or any segment of the market with one brush.

You will find froth even in a bear market in some segments and even in a bull market you will find value in many segments. Secondly, when it comes to mid and smallcaps, you have been in the market for a very long time. The one deciding factor always in mid and smallcap specifically is