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Economic Times
a day ago
- Business
- Economic Times
Mid-cap and small-cap stocks decline as investors take profits amid stretched valuations
Agencies Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Mumbai: Mid-cap and small-cap stocks - the outperformers in the recent market rebound - led the declines in equities on Thursday as investors grew wary of stretched valuations. The Nifty Midcap 150 and Small-cap 250 indices fell 1.6% and 1.9%, respectively, on Thursday, while the benchmark Nifty ended 0.1% lower."Post the outperformance in May, mid-cap and small-cap stocks are witnessing profit taking at higher levels as the valuations have become slightly stretched," said Nilesh Jain, head of derivatives and technical research, Centrum Broking. "Typically, quick up moves are followed by such retracements."The Nifty Midcap 150 and Small-cap 250 indices surged 6.3% and 9.3% each in May, outperforming the benchmark index, which gained 1.7% in the same period. Mid-cap and small-cap stocks have performed better than large-caps as the perception that smaller companies are less impacted by the ongoing global uncertainties has fuelled domestic investor appetite in these purchases from domestic equity mutual funds - flush with flows from individual investors - also drove up their share prices, pushing valuations back to their near-peak levels."Mid-cap and small-cap stocks have rallied up to 35% from the April lows and outperformed the benchmark Nifty, which gained around 16% in the same period," said Pankaj Pandey, head of retail research, ICICI Direct. "Post the sharp rally, there is some consolidation in the market."Jain does not rule out further declines of 2-4% for now, but recommends buying the weakness."While the short-term structure remains weak, most of the companies reported fairly inline earnings in this quarter and investors can accumulate quality picks in a staggered manner at further declines," he said investors can 'buy on dips' as the global uncertainty is expected to have a limited impact on these stocks, and the RBI interest rate cut has boosted liquidity, which is incrementally optimistic.
Time of India
a day ago
- Business
- Time of India
Mid-cap and small-cap stocks decline as investors take profits amid stretched valuations
Mumbai: Mid-cap and small-cap stocks - the outperformers in the recent market rebound - led the declines in equities on Thursday as investors grew wary of stretched valuations. The Nifty Midcap 150 and Small-cap 250 indices fell 1.6% and 1.9%, respectively, on Thursday, while the benchmark Nifty ended 0.1% lower. "Post the outperformance in May, mid-cap and small-cap stocks are witnessing profit taking at higher levels as the valuations have become slightly stretched," said Nilesh Jain, head of derivatives and technical research, Centrum Broking. "Typically, quick up moves are followed by such retracements." by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Philippines: Affordable Refrigerators for Sale - Check Out the Prices! Refrigerators | Search Ads Search Now Undo The Nifty Midcap 150 and Small-cap 250 indices surged 6.3% and 9.3% each in May, outperforming the benchmark index, which gained 1.7% in the same period. Mid-cap and small-cap stocks have performed better than large-caps as the perception that smaller companies are less impacted by the ongoing global uncertainties has fuelled domestic investor appetite in these stocks. Continuous purchases from domestic equity mutual funds - flush with flows from individual investors - also drove up their share prices, pushing valuations back to their near-peak levels. Agencies "Mid-cap and small-cap stocks have rallied up to 35% from the April lows and outperformed the benchmark Nifty, which gained around 16% in the same period," said Pankaj Pandey, head of retail research, ICICI Direct. "Post the sharp rally, there is some consolidation in the market." Live Events Jain does not rule out further declines of 2-4% for now, but recommends buying the weakness. "While the short-term structure remains weak, most of the companies reported fairly inline earnings in this quarter and investors can accumulate quality picks in a staggered manner at further declines," he said. Pandey said investors can 'buy on dips' as the global uncertainty is expected to have a limited impact on these stocks, and the RBI interest rate cut has boosted liquidity, which is incrementally optimistic.
Economic Times
12-06-2025
- Business
- Economic Times
Is Nifty expensive? Why judge today's valuations through yesterday's lens, asks Pankaj Pandey
In the first half of the year, we may see pressure on the margin side but in the second half, deposits will also get repriced. In a market where the Nifty trades at 20 times FY27 PE, the immediate reaction is often to cry "overvaluation" based on historical standards. But Pankaj Pandey, Head of Retail Research at ICICI Direct, argues this approach is fundamentally flawed. The veteran analyst contends that India's benchmark index has undergone a structural transformation that renders historical comparisons obsolete. Companies like Reliance, which historically traded at 15-16x multiples, can no longer be evaluated through the same lens due to their evolved business models. Similarly, high-growth retail players like Trent commanding 67x forward multiples reflect a new breed of companies with different growth trajectories and market dynamics. "The composition of Nifty itself has changed," Pandey emphasizes, suggesting that while current valuations may appear rich, they're not necessarily overvalued when viewed through the prism of today's business realities rather than yesterday's can make mistakes. Please double-check responses. Edited excerpts from a chat: Do you think the smallcap rally is in sync with the Q4 results? How much of it is led by liquidity of retail and mutual funds? Pankaj Pandey: The challenge is that we tend to generalise midcap and smallcap a lot because only top 100 stocks are largecaps, next 150 are midcaps, and then the entire lot is smallcaps. So, it is a fairly large universe. There are some pockets where you are seeing valuation being extremely rich. There are some pockets where things are more or less sober. It is a stock picker's in general, most of the domestic macros are largely intact, in fact, getting better only, which is a positive tailwind for smallcaps to do well. Thus, we do not see any challenge with smallcaps not performing well. They get beaten down more when your macros turn worse and domestically, our macros are getting better only. So, from that perspective we do not see a challenge with midcap or smallcap as a category right from growth to valuation to even liquidity also. Do you think that smallcap froth that we saw last year is settled now? Pankaj Pandey: The way we look at corrections is that every year Nifty will have a tendency to correct at least 10 to 15 percent. And it can happen multiple times. Midcap and smallcaps, being riskier, the extent of correction could be 20-30 percent or more in individual stocks. So, what happened last year or even this year is not out of the blue. It is just that every time they correct and people start putting a picture that these are untouchables. You have a lot of smallcaps where the balance sheet is quite healthy and you do not have issues with at hospitals, for example. You have two hospitals which have a market cap of Rs 1 lakh crore - Max and Apollo. You also have the likes of HCG, Narayana Hrudayalaya. We like most of them. Do you think Q4 was the last of downgrades as far as earnings are concerned? Are we at the bottom of the downgrade cycle? Pankaj Pandey: That is what we would want to believe. FY25 was an election year. The entire commodity pack got impacted with cement and steel prices getting hit. GRMs were soft. Now quarter-on-quarter volume growth is picking up in cement. The EBITDA per tonne for most cement companies has been pretty good. Tata Steel is looking for a Rs 3,000 kind of a price hike. If you are making Rs 12000 EBITDA per tonne, Rs 3000 is a significant number as the entire benefit flows on the bottomline. Similarly, for the GRMs, while it is stable, the crude has come down, so we would want to stick to the marketing side, as they will do well unless the government intervenes. What is the kind of expectations that you are baking in from the Q1 earning season? Pankaj Pandey: In FY26 we are expecting ~11% kind of growth. Nifty is now trading about 20 times FY27 PE. One of the concerns that get highlighted is that the valuations are rich. But you have to break it down into company-wise. Let's look at RIL, which has the highest weightage in the index. You cannot expect Reliance which used to historically trade at 15-16 multiple to trade at similar multiples because the business model has undergone a in the retail space, Trent has been doing exceptionally well compared to the rest of the pack. This is one company which has been growing at 35-40% and trading at 67 times on a forward basis. So, it is commanding two-time PEG. The composition of Nifty itself has changed. We cannot be looking at the historical perspective and saying that the market multiples are beyond value. It is rich, but not overvalued, I would say. Nikhil Agarwal: As far as portfolio construction is concerned, what is your view on holding cash? Pankaj Pandey: Generally, we do not suggest holding a high proportion of cash because we have seen historically it is a very difficult call to take. Thus, we do not suggest customers to sit on cash big time. For example, if you do not like the market, then you take stocks which are pseudo cash. So, for example, when the market is bad, then you look for largecaps, you look for FMCG, or you look at the categories which will get less impacted. So, these are your FD kind of positions because you can get 7% or high single-digit returns there. But once the market changes gear, then you can potentially move to some riskier categories. For holding cash, you need luck to get prices at lower levels and most importantly, courage to deploy cash during such times. Whosoever has been waiting on the sidelines, probably has missed one leg of the rally. Nikhil Agarwal: Which sectors are you bullish on? Pankaj Pandey: We like the BFSI space. Within which, we like AMCs like Nippon and HDFC AMC. We also like banks, where you can't complain that valuations are rich. Banks can be something which can keep doing well, not to say that they will be the top performers, but they should be in your portfolio because most of the banks are looking good. The other factor is that the bulk of the FII selling is behind us. In banks, they are no longer negative. In the first half of the year, we may see pressure on the margin side but in the second half, deposits will also get repriced.
Time of India
12-06-2025
- Business
- Time of India
Is Nifty expensive? Why judge today's valuations through yesterday's lens, asks Pankaj Pandey
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel In a market where the Nifty trades at 20 times FY27 PE, the immediate reaction is often to cry "overvaluation" based on historical standards. But Pankaj Pandey , Head of Retail Research at ICICI Direct, argues this approach is fundamentally veteran analyst contends that India's benchmark index has undergone a structural transformation that renders historical comparisons obsolete. Companies like Reliance, which historically traded at 15-16x multiples, can no longer be evaluated through the same lens due to their evolved business models. Similarly, high-growth retail players like Trent commanding 67x forward multiples reflect a new breed of companies with different growth trajectories and market dynamics."The composition of Nifty itself has changed," Pandey emphasizes, suggesting that while current valuations may appear rich, they're not necessarily overvalued when viewed through the prism of today's business realities rather than yesterday's can make mistakes. Please double-check excerpts from a chat:The challenge is that we tend to generalise midcap and smallcap a lot because only top 100 stocks are largecaps, next 150 are midcaps, and then the entire lot is smallcaps. So, it is a fairly large universe. There are some pockets where you are seeing valuation being extremely rich. There are some pockets where things are more or less sober. It is a stock picker's in general, most of the domestic macros are largely intact, in fact, getting better only, which is a positive tailwind for smallcaps to do well. Thus, we do not see any challenge with smallcaps not performing well. They get beaten down more when your macros turn worse and domestically, our macros are getting better only. So, from that perspective we do not see a challenge with midcap or smallcap as a category right from growth to valuation to even liquidity way we look at corrections is that every year Nifty will have a tendency to correct at least 10 to 15 percent. And it can happen multiple times. Midcap and smallcaps, being riskier, the extent of correction could be 20-30 percent or more in individual stocks. So, what happened last year or even this year is not out of the blue. It is just that every time they correct and people start putting a picture that these are untouchables. You have a lot of smallcaps where the balance sheet is quite healthy and you do not have issues with at hospitals, for example. You have two hospitals which have a market cap of Rs 1 lakh crore - Max and Apollo. You also have the likes of HCG, Narayana Hrudayalaya. We like most of is what we would want to believe. FY25 was an election year. The entire commodity pack got impacted with cement and steel prices getting hit. GRMs were quarter-on-quarter volume growth is picking up in cement. The EBITDA per tonne for most cement companies has been pretty good. Tata Steel is looking for a Rs 3,000 kind of a price hike. If you are making Rs 12000 EBITDA per tonne, Rs 3000 is a significant number as the entire benefit flows on the bottomline. Similarly, for the GRMs, while it is stable, the crude has come down, so we would want to stick to the marketing side, as they will do well unless the government FY26 we are expecting ~11% kind of growth. Nifty is now trading about 20 times FY27 PE. One of the concerns that get highlighted is that the valuations are rich. But you have to break it down into look at RIL, which has the highest weightage in the index. You cannot expect Reliance which used to historically trade at 15-16 multiple to trade at similar multiples because the business model has undergone a in the retail space, Trent has been doing exceptionally well compared to the rest of the pack. This is one company which has been growing at 35-40% and trading at 67 times on a forward basis. So, it is commanding two-time PEG. The composition of Nifty itself has changed. We cannot be looking at the historical perspective and saying that the market multiples are beyond value. It is rich, but not overvalued, I would we do not suggest holding a high proportion of cash because we have seen historically it is a very difficult call to take. Thus, we do not suggest customers to sit on cash big time. For example, if you do not like the market, then you take stocks which are pseudo cash. So, for example, when the market is bad, then you look for largecaps, you look for FMCG, or you look at the categories which will get less impacted. So, these are your FD kind of positions because you can get 7% or high single-digit returns there. But once the market changes gear, then you can potentially move to some riskier categories. For holding cash, you need luck to get prices at lower levels and most importantly, courage to deploy cash during such has been waiting on the sidelines, probably has missed one leg of the like the BFSI space. Within which, we like AMCs like Nippon and HDFC AMC. We also like banks, where you can't complain that valuations are rich. Banks can be something which can keep doing well, not to say that they will be the top performers, but they should be in your portfolio because most of the banks are looking other factor is that the bulk of the FII selling is behind us. In banks, they are no longer negative. In the first half of the year, we may see pressure on the margin side but in the second half, deposits will also get repriced.
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Business Standard
09-06-2025
- Business
- Business Standard
How ICICI Bank RM stole Rs 4.6 cr from customers - and what you must learn
In a shocking case of internal bank fraud, an ex-ICICI Bank relationship manager in Kota, Rajasthan, has been arrested for stealing Rs 4.58 crore from over 110 customer accounts — many of them senior citizens — over a period of nearly three years. The fraud, which went undetected for months, highlights the urgent need for personal finance vigilance, especially in the digital banking era. Such was the extent of her obsession with stock market trading that the 26-year-old Sakhi Gupta went to shocking lengths — allegedly siphoning off Rs 4.58 crore from unsuspecting customers, including even her own father-in-law. The funds were reportedly diverted into high-risk futures and options (F&O) trading, in a desperate bid to profit from speculative market movements. According to police, Gupta has been pilfering from more that 110 accounts belonging to 41 customers for around two years at the Kota branch. She allegedly invested this amount in the stock market and lost the majority of it. How did the fraud occur? According to police and internal bank investigations, the accused, Sakshi Gupta, misused her access to break customer FDs prematurely, create overdrafts, sanction loans, and reroute funds to her personal trading accounts. She allegedly: Broke 31 FDs worth Rs 1.34 crore without informing customers. By changing mobile numbers to relatives' lines, she prevented customers from receiving alerts and hiding transactions Stolen money was routed through a 'pool account' (one elderly customer's account with over ₹3 crore) before being transferred to her demat/trading accounts. All ₹4.58 crore were invested in F&O trades via apps like Zerodha and ICICI Direct, but she reportedly lost the entire amount How the scam unfolded: According to the police investigation, the relationship manager broke fixed deposits (FDs) prematurely, created overdraft facilities, and even took personal loans in the names of unsuspecting customers — all without their consent or knowledge. The fraudulent transactions spanned over months and were cleverly hidden using manipulated entries in the bank's internal systems. She exploited her access to ICICI Bank's Insta Kiosk and digital banking channels to carry out these unauthorized transactions, betraying the trust of both the bank and its customers. What's more worrying: she reportedly manipulated entries in ICICI Bank's internal software to cover her tracks, making it difficult for both customers and internal auditors to detect any red flags. The police also alleged that Gupta misused debit cards, PINs, and OTPs for these transactions, and even activated overdraft facilities on 40 accounts without consent. In addition to this, she permanently closed fixed deposits of 31 customers and funneled over Rs. 1.34 crore, while also taking a personal loan of Rs. 3.40 lakh. What Is a pool account, and why it matters? A pool account is typically used to consolidate funds from various sources. In this fraud: She collected money from broken FDs, overdrafts, and fake loans into one account. From there, funds were easily routed to her personal investment accounts. This minimized red flags, since transactions were less scattered and easier to manage. By centralizing transactions, she avoided the complexity and detection risks associated with moving money through 40+ accounts. Who were the victims? Most of the victims were elderly customers, many of whom relied on FDs as a source of post-retirement income. They remained unaware as alerts were rerouted and their bank accounts tampered with behind the scenes. A customer complaint about a missing FD triggered an internal audit by ICICI, leading to a branch manager filing an FIR on February 18, 2023, and her arrest in May 2025. What did ICICI Bank do? ICICI Bank filed an FIR and confirmed that all affected customers have been compensated. The bank has since strengthened internal controls, but the incident raises serious questions about employee oversight and customer protection. An ICICI Bank spokesperson, in a press note, said that the interest of costumes is most important and upon discovering the activities the bank immediately filed an FIR. "We have a zero-tolerance policy against any fraudulent activity,' they said, adding that the employee has been suspended and genuine claims of impacted customers have been settled. Key red flags: FDs were closed without OTPs being triggered. No transaction alerts were received by customers due to outdated contact details. Customers only realized something was wrong after significant sums were gone What this means for you? If you're a bank customer: Check your alerts: Ensure your mobile number and email are updated with your bank to receive all transaction notifications. Monitor FD and loan activity: Unexpected closure of FDs or creation of overdrafts should raise red flags. Review bank statements regularly, especially if you're a senior citizen or non-tech-savvy. Immediately report any suspicious changes (like mobile number alterations or OTP behavior) to your bank's fraud cell.
