India’s smallcap universe has more than doubled in value since April 2023, leaving investors to confront a difficult question: after such a powerful rally, is it time to shift to largecaps? Vikas Khemani, founder of Carnelian Capital, believes the answer is no. While smallcaps are no longer cheap on trailing earnings, he argues that they remain the most direct way to participate in India’s domestic growth story, provided investors can identify the right businesses.
“Small caps are the India story,” Khemani wrote in Carnelian’s latest investor letter.
