Mid caps are expected to generate higher returns than large- and small-cap stocks, said Prateek Agrawal, executive director at Motilal Oswal Asset Management Co.
Although valuation comfort is relatively lower, most of the growth-focused themes are part of the mid-cap segment, Agrawal said in an interview with BQ Prime's Niraj Shah. Mid caps are likely to fare better than the other two categories, like in the last one year, he said.
Nifty Midcap has surged 33.4% over the past year, while Nifty Smallcap and Nifty LargeMid Cap gained 27.3% and 21.9%, respectively. The benchmark Nifty 50 has risen 20.1% during the period.
Sectors To Watch
The information technology sector may positively surprise in the first quarter results of FY24, particularly in the large-cap space, said Agrawal. Midcap IT firms have faced tailwinds in auto-tech and travel tourism segments, leading to numbers similar to their guidance, he said.
Consumer durables, luxury consumption, and possibly the fast-moving consumer goods sector may surprise on margin expansion, according to Agrawal. Premiumisation, along with improved spending in the female categories, may drive the sector's margin, he said.
Real estate is seeing good demand as after a point, higher interest rates don't matter," said Agrawal.
Housing demand is expected to grow strongly, including in expensive markets like Mumbai, as India's economy grows, according to Agrawal. Ancillary sectors like cement and pipes are also good bets, he said.
Watch the full conversation here:
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