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market | IST

IIFL’s GV Giri bets on smallcap and midcap stocks; says good companies will not suffer

“Good companies will probably not suffer as much, in relative terms, relative to the smallcap index, midcap index or relative to any de-rating that happens and they will see their earnings growth continue,” said Giri.

GV Giri, head-research at IIFL Institutional Equities, on Tuesday said that still there are some companies with strong earnings growth and reasonable valuations.
In an interview with CNBC-TV18, he said, “In the note, we have tried to pick some of those kinds of names out. Value might be a misleading term because sometimes companies just face value traps, but a couple of instances where we think that the earnings growth be very strong and stocks are extraordinarily rich in the midcap and smallcap space, for instance, Chambal Fertilisers and Chemicals, Kaveri Seed Company, Craftsman Automation, but broadly, wherever else you look, multiples have gone up. So we have to do the best we can in terms of picking the relative value.”
“Therefore, choose companies where there is strong earnings visibility and where companies are not trading too far above their own historical levels,” Giri said.
According to him, good companies will not suffer in relative terms if de-rating happens. “Good companies will probably not suffer as much, in relative terms, relative to the smallcap index, midcap index or relative to any de-rating that happens and they will see their earnings growth continue,” said Giri.
For more details, watch the accompanying video