D-Street Talk: Steps taken in Budget 2020, RBI policy could fuel rally in small & midcaps  

Steps taken by the government in the Budget 2020, as well as the recent RBI policy meeting, augers well for the mid and smallcaps, says Abhishek Bansal, Chairman, and Managing Director, Abans Group of Companies in D-Street Talk, a special Moneycontrol podcast.

According to Bansal, small and midcaps look interesting especially from the valuation point of view. “If we look at the midcap space, the PE ratio of Midcap 100 is 25x which is lowest points if we take the data for the past 2-3 years,” said Bansal.

“In the smallcap space as well, the PE is at 50x. The stimulus given by the RBI will help the retail sector because of the lower cash reserve ratio (CRR), and the long term purchase repo being fixed at 5.15% will help the retail sector,” added Bansal.

Bansal is of the view that both small & midcap space will go up in 2020, but in terms of pricing, midcaps sector is highly undervalued PE at 25x. Going forward, we could see a positive rally in the midcap space, he said.

(Tune in to the podcast for more)

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