PGIM India's Aniruddha Naha sees value in largecaps, select smallcaps after market correction

What happened

PGIM India Asset Management's Chief Investment Officer Aniruddha Naha said the recent midcap and smallcap correction was largely driven by excessive valuations, with many stocks building in very high price-to-earnings ratios into FY28 and FY29. He sees value in largecaps and select smallcaps.

Confirmed

Global impact / market context

Naha's view suggests largecap stocks may offer steadier value than midcaps, which still look expensive. If his call attracts investor money toward largecaps and select smallcaps, buying demand could shift away from richly priced midcaps and push their prices lower.

Analyst inference

The article points to a recent market correction that hit midcap and smallcap stocks hardest because their valuations had run ahead of earnings expectations. Naha prefers largecaps for valuation comfort, then select smallcaps, while flagging midcaps as still stretched and naming capital goods, discretionary consumption, sugar, commodities and auto ancillary companies as areas of interest.

Analyst inference

What to watch

1. Naha remains positive on capital goods, discretionary consumption, sugar, commodities and auto ancillary companies, and sees opportunities in smaller capital goods companies trading in the smallcap segment. Confirmed
2. Watch whether largecap and select smallcap stocks attract more investor money after the correction, which could move buying demand away from midcaps that Naha still considers expensive. Analyst inference
3. Track whether the correction continues to create buying opportunities Naha describes across his favoured sectors, and whether midcap valuations ease enough to change his cautious stance. Proposed

Evidence

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