We will deploy cash in largecaps on another 10% dip; comfortable with BFSI, IT: Chirag Mehta

Chirag Mehta, CIO, Quantum AMC, says small and midcaps are still a bit expensive and there could be some more current downsides because of the high valuations that prevail in those segments. From a largecap perspective, some pockets of opportunity are starting to emerge. But on a broader basis, there could be some more downside from here on and would give a good opportunity to deploy further into the markets. Mehta also says in the case of IT, on a holistic basis, there could be near-term jitters, but from a medium to long-term perspective, we are still comfortable with what Indian IT services can deliver.
What is your take on the markets right now? We are seeing of late that India is witnessing a bit of a recovery, but it is the global peers that are under pressure. Has the majority of the selling for Indian markets already happened and maybe it is time to look out for some of the opportunities in this market or do you believe that there could be some more pain in store?
Chirag Mehta: Yes, India was doing well in terms of economic growth over the last two years on a relative basis and also the market was reflecting that. But markets got carried away in terms of valuations that they were prevailing in across the segment and more so in the mid and smallcap segment given the flows to that segment were very high.

So, overall, the correction was needed, was warranted, and we have seen that correction. And the reason for that correction was a slight slowdown that we started seeing in the Indian economy per se with