Midcap should continue to outperform large cap indices: Deutsche

Abhay Laijawala of Deutsche Bank says the architecture of the financial savings of Indian households is undergoing a structural shift.This has already been witnessed in the rising share of financial assets in household savings rising from 32 percent in FY12 to 40 percent in FY15 & an unprecedented wave of inflows into domestic equity mutual funds over the past three years, he adds.

He believes this trend is set to intensify further and, in an optimistic scenario, average annual household flows into equities over FY18-20 could be 2x the past three years' average of total flows into equity mutual funds.

Laijawala says midcaps should attract a disproportionate amount of funds from domestic & institutional investors and should continue to outperform large cap indices.

Top midcap picks are CESC, Petronet LNG, Shriram Transport & UPL, he says.