Large Caps Vs Mid- & Small-Caps - Valuation Discount Dipped, Not Disappeared: ICICI Securities
Electronic ticker boards indicate the latest stock figures inside the atrium at the NSE in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Large Caps Vs Mid- & Small-Caps - Valuation Discount Dipped, Not Disappeared: ICICI Securities

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

As per our proprietary ‘risk-spread’ framework, large caps have a trailing earnings yield of 3.5% while mid, small and micro caps continue to yield higher at 4.2%, 4.5% and 6%, respectively.

While the yield spread of mid and small caps over large caps has dipped sharply since the end of CY19 due to their outperformance, it has not disappeared or turned negative, which typically coincides with the peaking out of mid and small caps.

Headline price/earning valuations of mid and small cap indices are significantly distorted as they currently have significant loss pools thereby optically magnifying the numbers.

Click on the attachment to read the full report:

ICICI Securities Strategy small and midcaps.pdf


This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.