Prefer largecaps now but one can be stock-specific in small and midcaps: Shibani Sircar Kurian

Shibani Sircar Kurian, Senior EVP, Sr. Fund Manager & Head -Equity Research, Kotak AMC, says that a considerable number of stocks are trading almost 50% lower than their 52-week high. So, some degree of valuation comfort is coming in. We are approaching this market by looking at stocks with earning visibility. Largecaps continue to offer better risk-reward as compared to mid and smallcaps as a pack. However, within mid and smallcaps, there are definite points of opportunity and we would use these corrections to look at these particular segments and stock in terms of allocation.
Help us with your take on the markets because some are calling out a near-term bottom in place and also trying to look out for some more opportunities. We saw a bit of a rebound on Wednesday. What is your reading?
Shibani Sircar Kurian: Since December of last year, the volatility has been on the back of global as well as domestic factors and some of these uncertainties still remain. However, what we must also understand is that when we look at markets, the Nifty itself has corrected almost 13-14% from its highs. Similarly, the midcap and smallcap indices have seen a greater correction. More importantly, at a stock level, the correction has been even steeper than what the headline indices seem to suggest.

In this context, when we look at valuations today, we believe that Nifty, especially in terms of the largecap composition, is trading at multiples which are lower than its long-term averages. Also, as far as the Nifty is concerned, we have