Go bottom-up to grab opportunities in mid & smallcaps: Shibani Sircar Kurian
Live Events
You Might Also Like:
How will midcap and smallcaps perform vis-a-vis largecaps going ahead? Mahesh Patil explains
(You can now subscribe to our
(You can now subscribe to our ETMarkets WhatsApp channel
, Senior EVP, Sr. Fund Manager & Head -Equity Research,, says Q4 FY25 earnings exceeded muted expectations, particularly for largecaps and select midcaps, setting a positive tone for FY26. Double-digit earnings growth is anticipated for FY26, contingent on a stable domestic macro and supportive policies. While valuations are elevated, largecaps offer a better risk-reward profile, though opportunities exist in mid and smallcaps requiring a bottom-up approach.: Yes, we have had an exciting week with a lot of policy action. But what has been a standout for us in the market has been that domestically, most of the macro parameters, especially in context of what is happening globally with the trade and tariff war as well as geopolitical tensions, domestic macro seems to be holding up fairly reasonably well and, of course, the policy push from a monetary side which we have seen over the last week or rather this entire calendar year to date and liquidity improving overall. The other factor is that the market will clearly focus on the earnings trajectory.So, when one looks at Q4 FY25 earnings, despite the fact that expectations were muted, the earnings delivery was better than expectations, especially where the largecaps and a select few midcaps were concerned and therefore, that sets the trend in terms of how earnings possibly pans out for FY26. On a mid single-digit earnings delivery for 25, now the consensus expectation for FY26 is of double-digit earnings growth and if the domestic macro continues to hold up and there is support in terms of growth from a policy perspective, hopefully earnings should start to improve at a moderate pace and that should be the factor that the market looks out for.From a valuation standpoint, our markets are not cheap and given the current run-up, we believe that from a risk-reward perspective, largecaps still continue to be better placed than mid and smallcaps. But there are opportunities in mid and smallcaps and therefore, one has to be more bottom-up in that segment. The mid and smallcaps continue to trade at a premium to their long-term average multiples.Consumption is a space where we believe there are quite a few triggers. One, as you rightly mentioned, the Budget set the tone with the tax benefits that were given to the middle income and the mass segments, and therefore that should help in terms of boosting consumption.The second is, of course, interest rates have come down with the RBI cutting policy rates by 100 basis points calendar year to date and the CRR cuts which are to follow. From that perspective, the interest rate burden on the consumer should also start to come down.The third factor for consumption is the monsoons. Hopefully, as per what has been the initial estimates, monsoons this time around are normal and that will help in terms of boosting rural income. When you look at the income buckets within rural and urban areas, we have been seeing that rural income levels have started to improve and with inflation coming down, real rural wages have improved considerably over the last year and that is possibly supporting demand.What has been missing has been the urban mass consumption demand and hopefully now with rates being cut and the impact from the Budget will help in terms of higher disposable income. Some amount of that urban consumption should start to come back and therefore, the consumer discretionary pack, especially in terms of mass consumption, is a segment that should likely benefit in this current policy environment and overall macro environment.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
28 minutes ago
- Economic Times
Bombs, battles & bullion: Why gold is having a geopolitical moment
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel In recent weeks, global financial markets have been rocked by escalating geopolitical tensions, particularly the outbreak of war between Israel and Iran and renewed hostilities between Ukraine and Russia . These developments have significantly influenced investor sentiment, driving a surge in demand for safe-haven assets—most notably, gold The conflict between Israel and Iran intensified dramatically in the second week of June 2025, following Israel's airstrikes targeting Iranian nuclear facilities and missile sites. These strikes reportedly killed senior Iranian military officials and top nuclear scientists, prompting swift retaliation from Iran in the form of drone and missile on Saturday, US President Donald Trump said American forces struck Iran's three main nuclear sites, and he warned Tehran it would face more devastating attacks if it does not agree to escalation has raised fears of a broader regional war in the Middle East, a region critical to global energy supplies and a result, gold prices have surged, with overseas spot gold nearing an all-time high of $3,451 per ounce last week. Meanwhile, in the domestic futures market, prices tested a record high of Rs 99,929 per ten grams. This spike reflects heightened investor anxiety and a flight to safety amid growing uncertainty. Historically, gold has served as a hedge against geopolitical risk, and the current crisis has reaffirmed its role as a refuge in turbulent the Israel-Iran war has dominated headlines, the ongoing conflict between Ukraine and Russia continues to exert pressure on global markets. The prolonged war has disrupted energy supplies, strained European economies, and contributed to inflationary pressures factors have reinforced the bullish outlook for gold. Investors are increasingly wary of prolonged instability and its implications for global growth, prompting them to diversify away from riskier assets and into geopolitical factors, macroeconomic conditions have also played a crucial role in shaping gold's trajectory. Recent U.S. inflation data came in softer than expected, with the Consumer Price Index (CPI) rising just 0.1% in May 2025. This has strengthened expectations of interest rate cuts by the Federal Reserve, potentially as early as September interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive to investors. Additionally, central banks—particularly in China and Russia—have continued to accumulate physical gold as part of their strategy to diversify away from the U.S. sustained demand has contributed to a 29 percent increase in gold prices so far this year. In the last two-years, gold has risen by over 70 ahead, the underlying drivers—geopolitical risk, inflation concerns, and monetary policy shifts—remain firmly in place. This may prompt gold to trade near record highs. In addition, the dual impact of the Israel-Iran war and Ukraine-Russia conflict has created a potent mix of risk factors that are unlikely to dissipate recent surge in gold prices underscores the metal's enduring appeal as a safe-haven asset during times of geopolitical and economic turmoil. As the world grapples with the fallout from the Israel-Iran war and the ongoing Ukraine-Russia conflict, investors are likely to maintain their bullish stance on gold. With central banks signaling dovish policies and global risks mounting, gold remains a cornerstone of defensive investment strategies in 2025.(The author is Head of Commodities, Geojit Investments)(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times.)
Time of India
3 hours ago
- Time of India
Urban challenge fund to focus on revitalising core areas of cities
Danny generated AI Image NEW DELHI: The next phase of central assistance (seed funding) for states to take up transformative projects under the Rs 1 lakh crore Urban Challenge Fund (UCF) will focus more on revitalising core areas of cities and fixing legacy infrastructure gaps, such as bad drainage, sanitation and polluted water bodies. Officials said the focus of this funding will be on projects that have a transformative impact. Centre will provide such financial aids to 500-1,000 small cities as well to take up projects, they said. The housing and urban affairs ministry has finalised the UCF scheme and it is likely to be launched soon, sources said. TOI on Jan 13 had reported that PM Narendra Modi has directed ministry officials to focus more on creating facilities, amenities and better transportation network in those areas of cities which naturally attract people and businesses, rather than developing new cities. Following the PM's direction, more thrust is now on having a better framework for transit-oriented development (TOD) for cities to push intensive and planned growth along transportation networks, the sources said. Speaking at a CII-organised conference, additional secretary in the ministry, D Thara, said, "In UCF, we are looking at revitalisation of cities and fixing of legacy infrastructure as a primary goal. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Memperdagangkan CFD Emas dengan salah satu spread terendah? IC Markets Mendaftar Undo We are not in a hurry to fund. We are clear that these projects should bring huge transformation and big impact. It can't be unfixing small things here and there. The project could be of any size but it has to be make a lot of difference to citizens. " The focus is not about building afresh but about fixing what already exists, she added. Officials said under UCF, govt is also likely to provide seed fund for developing new greenfield areas, with good rail connectivity, as future cities. In her Budget speech, finance minister Nirmala Sitharaman had announced the seting up of UCF to implement proposals for 'Cities as Growth Hubs', 'Creative Redevelopment of Cities' and 'Water and Sanitation'.
Time of India
3 hours ago
- Time of India
Retail Direct: RBI enables auto-bidding facility using NACH mandate for investing in T-Bills; Know how it will work
What are the key features of the auto-bidding facility? Academy Empower your mind, elevate your skills Auto-bidding is available only for T-bills and requires a valid NACH mandate. Types of Rules: The rules can be amended, paused or cancelled anytime. Auto-bid is funded through NACH mandate linked to your registered bank account in the Retail Direct. Sufficient balance in the registered bank account is needed for funding the Auto-bid. Email and SMS alerts are sent for Auto-bid Rule creation, amendment, cancellation, expiry, bid placement, etc. What are treasury bills? What are the day count conventions used in calculating bond yields? The Reserve Bank of India RBI ) has enabled an auto-bidding facility for investing in treasury bills (T-bills) via both the RBI retail direct website and the app. This auto-bidding facility requires a valid NACH (National Automated Clearing House) mandate for executing the T-Bills this additional facility, you can invest in T-bills by placing a conditional order that matches your requirements. It's similar to wanting to buy a stock at Rs 120 when the current market price is Rs 125. You would then put a conditional order saying that as soon as this stock's price drops to Rs 120, you will go ahead and buy RBI said: 'This facility complements the existing manual bidding option, and allows you to set investment preferences, viz., T-bill tenor, bid amount, bidding frequency and validity period, by creating Auto-bid Rules that are executed automatically once the bidding window of the respective T-bill auction becomes active on the RD portal/App.'The RBI said that you should start by adding a bank account and setting up a NACH mandate . This way, when your conditional order (auto-bidding) is activated, the funds can be withdrawn from your bank account to complete the to the RBI, key features of the facility are:Set the intended T-bill tenor, bid amount, bidding frequency, and period of rule validity. Bids will be auto-placed when the conditions are specific T-bill auction/s from the Quarterly Calendar for Auction of T-bills and specify the bid amount. The rule is to be set before the commencement of bidding of the respective auction on the RD portal/ T-bills investors, this auto-bidding feature means that they don't have to manually submit bids for T-Bills auctions. This can really cut down the time it takes to invest in T-Bills investment if the conditions of the conditional order are Bills (T-Bills) are money market instruments or short term debt instruments issued by the Government of India. At present, they are issued in three tenors -- 91 days, 182 days and 364 days. The Treasury Bills are zero coupon securities and pay no interest. Instead they are issued at a discount and redeemed at face value on example: a 91 day Treasury bill of Rs 100 (face value) may be issued at say Rs 98.2, that is, at a discount of Rs 1.9 and would be redeemed at the face value of Rs 100. The return to the investors is the difference between the maturity value or the face value (that is Rs 100) and the issue price).According to the RBI website, the day count convention is the method used to determine the holding period (in days) of a bond for calculating the accrued interest. Since using different day count conventions can lead to varying amounts of accrued interest, it is important for everyone in the market to follow a standard day count conventionFor example, the conventions followed in the Indian market are as follows:Bond market: The day count convention followed is 30/360, which means that irrespective of the actual number of days in a month, the number of days in a month is taken as 30 and the number of days in a year is taken as market: The day count convention followed is actual/365, which means that the actual number of days in a month is taken for number of days (numerator) whereas the number of days in a year is taken as 365 days. Hence, in the case of T-Bills, which are essentially money market instruments, money market convention is followed.
