The small & midcap space which got beaten down sharply in the last 1-2 months had outperformed largecaps as well as every other asset class by a wide margin in the year 2017.
Many analysts fear that the pain in this space is not over yet which given plenty of opportunity to investors to pick quality stocks on declines.
The equity portfolio of Porinju Veliyath, also known as mid & smallcap czar, includes 13 stocks (as per a BSE disclosure) in which he holds over 1 percent.
Out of which, four stocks rose up to 250 percent in the last one year include names like Emkay Global (up 255 percent), followed by BCL Industries (up 228 percent), IZMO (up 109 percent), and Vista Pharma (up 108 percent).
Recently, Equity Intelligence picked up minor stake in Kaya which send it shares rallying up to 5 percent in trade on Tuesday.
Portfolio Management clients of Equity Intelligence India Private Limited and EQ India Fund, which are owned by ace investor Porinju Veliyath, acquired 13,350 shares (representing 0.1 percent of total paid-up equity) of the company, as per disclosure available on the exchange on Monday.
Investors made plenty of money thanks to the sharp rise seen in equity markets in the year 2017 of 29 percent. But, 2018 will be different. It will give plenty of opportunities to long-term investors but may be tough for traders as consolidation in the market is likely to continue.
The valuation does look stretched in specific stock which could see some more pain, but overall the markets is not in a bubble zone and long-term investors have nothing to worry about, says Porinju in an interview with CNBC-TV18.
“The market is not looking into any bubble territory, they look reasonable and healthy. In the fantastic rally of 29 percent on the Nifty in 2017, investors made average 30-40 percent kind of returns and smart investors made 80-90 percent returns; but in 2018, investors have to live with much lower return expectations, he said in an interview last week.
The correction, for the time being, is done, but some stocks, which are still overpriced, may correct more. Smart investors can create wealth by using midcap and smallcap theme for another 2-3 years, said Veliyath.
Porinju strongly believes politics will take the centre stage on Dalal Street over next one-and-half-years. In fact, politics will be trend decider for the market.
All-in-all, this is a year of consolidation but I am optimistic on investing front. India is in the midst of huge economic reforms, he believes.
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