Midcaps and smallcaps may still offer strong earnings growth, but much of that optimism is already reflected in their prices. With the broader-market indexes trading at premiums of as much as 50% to their long-term valuations, Bajaj Life Chief Investment Officer Srinivas Rao Ravuri sees a more compelling risk-reward opportunity in largecaps.
After years of outperformance by the broader market, Ravuri says largecaps now offer better valuation comfort, earnings visibility and room for recovery. Edited excerpts from a chat:
