No need for broad-based profit booking in mid and smallcaps: Siddhartha Khemka
Siddhartha Khemka, Vice President, Head of Research, MOFSL, says “the premium is now about 15-20% and mid and smallcap space is where one needs to be cautious. We do not believe that there is going to be a full large scale selling in the mid and small caps but a healthy profit booking is definitely advisable and that is something that we have been talking to customers about but it is not a broad-based profit booking that we are advising.”
Are you recommending booking profits anywhere? We are seeing quite a cool-off in some of the capital goods names, power financiers, railway and even defence stocks.
What has been happening is we have been sounding some cautiousness in the broader market, be it the midcaps or smallcaps, given that the kind of rally that they have seen in the last couple of months and also because if you look at the valuations, our midcap index is trading at about 24 times one year forward 24 to 25 times roughly on a one-year forward basis – compared to Nifty which at 20,000 is trading at about 21 times on a FY24 peak.
Unlock Leadership Excellence with a Range of CXO Courses
Offering CollegeCourseWebsiteIndian School of BusinessISB Chief Digital OfficerVisitIIM LucknowIIML Chief Marketing Officer ProgrammeVisitIndian School of BusinessISB Chief Technology OfficerVisitSo, the premium is now about 15-20% and that is a space where one needs to be cautious. We do not believe that there is going to be a full large scale selling in the mid and small caps but a healthy profit booking is definitely advisable and that is something that we have been talking to customers but it is not a broad-based profit booking that we are advising.
Selectively, some pockets which have done very well, where the valuations are kind of
