Tushar Pradhan, CIO of HSBC Global Asset Management (India) said on Wednesday that midcap IT ran ahead of themselves as valuations breached large-cap IT valuations, adding that margins have been suspect because of the rising costs, but that will plateau out at some point of time.
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“We have seen midcap IT actually go ahead of large-cap IT by multiples, in the last few months. There will be a period of self-correction there and markets generally tend to self-correct,” he told CNBC-TV18.
The midcap story is more to do with individual companies and individual growth factors and within the pack, one should look for significant strong growth trends, which are unique to any one company, Pradhan added.
While talking about the Indian equity market, Pradhan said that the economy is showing signs of green shoots. He further added that India is relatively more insulated versus global markets.
“The current move is a combination of factors. One, we have seen a significant outflow of money from the foreign portfolio investments (FPIs) but a quarter to date, we are seeing almost upwards of $8 billion, which have come in just in a matter of three months,” he said.
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