Latest news with #Jonagadla
Time of India
7 hours ago
- Business
- Time of India
BSE Sensex rallies strongly in first half of 2025: What's the outlook for the rest of the year & will small cap stocks do well? What experts say
Whilst conditions appear favourable for small-cap growth, success will depend on careful analysis and selective investment choices. (AI image) India's equity market appears set for a significant transformation as it enters the latter half of 2025. The first half of 2025 witnessed the Sensex climb approximately 8%, displaying notable strength in large-cap shares that guided Indian equities towards possible new heights. The Sensex has demonstrated remarkable growth, advancing 6,000 points over six months and currently stands 2,000 points below its peak levels. However, the market presents a contrasting scenario: despite the strong performance of blue-chip companies, the BSE Smallcap index has declined by 1.7% since January, whilst mid-sized companies have maintained relatively stable values, according to an ET report. Recent months have shown considerable changes in market dynamics, leading industry experts to consider whether smaller companies might dominate the remaining months of the year. Several optimistic market analysts have begun forecasting unprecedented market levels. Karthick Jonagadla, who leads Quantace Research as Founder & CEO, has presented particularly ambitious end-of-year projections. "We peg December-end targets of Nifty 26,500 and Sensex ~95,000, implying mid- to high-single-digit upside from current levels and new peaks well before calendar year-end," Jonagadla was quoted as saying by ET, backing his bold prediction with three powerful catalysts. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Adidas Three Shorts With 60% Discount, Limited Stock Available Original Adidas Shop Now Undo The RBI's assertive monetary policy, including a substantial 50 bps reduction in June bringing the repo rate to 5.50% and indicating a neutral position, has boosted market sentiment. This, coupled with unprecedented retail investments where SIP contributions reached Rs 26,688 crore in May, maintaining above Rs 20,000 crore for ten consecutive months, has strengthened market confidence. Also Read | 'Largest share sale through QIP': SBI plans Rs 25,000 crore Qualified Institutional Placement; appoints six banks for first share sale in 8 years International investment has shown positive trends, with "Foreign investors returned with about $5.5 billion of block-trade buying in May alone." FIIs have maintained net buying positions across the previous four months. A significant transformation is occurring in the smallcap sector, which is altering market patterns. Following a period of severe decline, smaller enterprises have demonstrated a remarkable recovery. "Smallcaps have staged a strong comeback. The BSE Smallcap index rose more than 20 percent in the second quarter. Midcaps also recovered. Momentum is building in the broader market, driven by improving fundamentals and stronger flows," Krishna Appala, Fund Manager at Capitalmind PMS was quoted as saying. Jonagadla anticipates continued growth: "Three forces should keep that tailwind alive in H2. Liquidity is turning supportive. Policy rates are falling just as earnings momentum broadens. Valuations have cooled." Technical indicators show significant improvement: "After the Q1 sell-off, the Nifty Smallcap 250 now trades a little below its 5-year median PE; profit-taking in June shows froth has come out of the trade." The earnings forecast remains positive: "Consensus still sees mid- and small-cap EPS growing in the high-teens for FY26." Small cap rally on the cards? The sustainability of the small-cap market recovery remains debatable. Expressing significant reservations about the broader market upswing, Amit Jain, Co-Founder of Ashika Global Family Office Services, maintains a conservative outlook. "Despite the recent bounce, we remain cautious on the smallcap and midcap space heading into H2," Jain warned. "This rebound has been driven more by liquidity than fundamentals. Valuations in many pockets remain stretched, and earnings upgrades have not kept pace with price action." He elaborates on additional risks beyond valuations: "Moreover, broader market participation is thinning, and concentration risk is high. The rally has largely bypassed companies with weak balance sheets or inconsistent cash flows, which still make up a large portion of the smallcap universe." His assessment concludes with a clear caution: "Unless earnings catch up meaningfully or we see strong policy tailwinds, the risk-reward for fresh entry into this segment looks limited." Also Read | Clearing NSE IPO hurdles: National Stock Exchange offers Rs 1,388 crore to SEBI; aims to settle co-location and dark fibre cases As the market transitions to its next stage, clear industry leaders are becoming apparent. The financial sector shows strong performance. "Lower policy rates and relaxed provisioning norms boost credit growth; PFC and REC leapt ~4% when the RBI's new rules landed, and PSU-bank indices hit six-month highs," Jonagadla noted. Appala agrees: "Lower interest rates are helping banks and NBFCs. Credit growth remains strong, and asset quality is stable." Infrastructure and capital goods sectors benefit from increased government investment. "Order books are overflowing—L&T reported a record ₹1 trillion intake in Q4 FY25—underpinned by ongoing central and state capex," Jonagadla said. Consumer spending shows positive momentum. "Rural demand is improving, and urban consumption is steady. FMCG, two-wheelers, and discretionary segments are showing healthy trends," Appala explained, pointing to improving "sales of two-wheelers, tractors, and FMCG products." Nevertheless, careful stock selection remains crucial. "Export-oriented pharma and chemicals could lag amid U.S. tariff noise, and defensives look fully valued," Jonagadla cautioned. Stock market Outlook Indian benchmarks demonstrate notable stability despite global market volatility from geopolitical conflicts, with Jain forecasting that indices could reach "further upside toward 26,500-27,000 in the coming months." Regarding small and midcap investments, Jonagadla maintains a balanced perspective: "H2 should show better absolute returns than H1, yet dispersion will stay wide, rewarding bottom-up quality screens." Appala presents a straightforward assessment: "There are good reasons to believe so. Inflation has cooled, the RBI has started cutting rates, and rural demand is recovering. These tailwinds support a more positive setup for smaller companies. However, valuations in this space remain expensive. Stock selection will be important." Also Read | Big $40 billion consumption boom on the horizon! Tax cuts, cheaper loans & 8th Pay Commission to drive new wave - what sectors should investors bet on? His strategic outlook encapsulates the current situation: "The first half of the year was largely driven by large-cap resilience. But the broader market is now gaining traction. With improving macros, better earnings, and steady inflows, the second half could offer opportunities — especially in sectors linked to India's growth story." Whilst conditions appear favourable for small-cap growth, success will depend on careful analysis and selective investment choices. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Economic Times
11 hours ago
- Business
- Economic Times
6,000-point Sensex rally overshadows market's real story: Smallcaps are staging a revolt
India's stock market is poised for a dramatic shift as the second half of 2025 beckons. With the Sensex already soaring 6,000 points in 6 months and sitting just 2,000 points shy of record highs, all eyes are turning to whether smallcaps can finally steal the spotlight from their largecap cousins ADVERTISEMENT The benchmark Sensex has surged about 8% in the first half of 2025, showcasing remarkable largecap resilience that has propelled Indian equities toward potential new peaks. But beneath this headline-grabbing performance lies a tale of two markets: while bluechip giants have dominated, the BSE Smallcap index remains stubbornly down 1.7% year-to-date and midcaps have barely managed to stay flat. Now, with momentum shifting dramatically in recent months, market veterans are asking the burning question: Could the second half belong to the smallcap universe? The most aggressive bulls are already sketching out a path to historic highs. Karthick Jonagadla, Founder & CEO at Quantace Research, has set jaw-dropping December-end targets that would shatter all previous records. "We peg December-end targets of Nifty 26,500 and Sensex ~95,000, implying mid- to high-single-digit upside from current levels and new peaks well before calendar year-end," Jonagadla declared, backing his bold prediction with three powerful catalysts. His confidence stems from the RBI's aggressive monetary easing. The RBI's front-loaded 50 bps cut in June takes the repo rate to 5.50% and signals a neutral stance, combined with record-breaking retail flows where SIP contributions hit another record Rs 26,688 crore in May and have stayed above Rs 20,000 crore for ten straight months. ADVERTISEMENT Also Read | Rs 1 lakh crore selloff tsunami threatens Nifty rally as promoters, strategic investors exit The foreign money is flowing back too: "Foreign investors returned with about $5.5 billion of block-trade buying in May alone." FIIs have been net buyers in all the last 4 months. ADVERTISEMENT The real story lies in the dramatic smallcap turnaround that's reshaping market dynamics. After months of brutal punishment, smaller companies have staged what can only be described as a spectacular comeback. "Smallcaps have staged a strong comeback. The BSE Smallcap index rose more than 20 percent in the second quarter. Midcaps also recovered. Momentum is building in the broader market, driven by improving fundamentals and stronger flows," Krishna Appala, Fund Manager at Capitalmind PMS said, highlighting the explosive reversal that caught many by surprise. ADVERTISEMENT Jonagadla sees this as just the beginning: "Three forces should keep that tailwind alive in H2. Liquidity is turning supportive. Policy rates are falling just as earnings momentum broadens. Valuations have cooled."The technical picture has improved dramatically: "After the Q1 sell-off, the Nifty Smallcap 250 now trades a little below its 5-year median PE; profit-taking in June shows froth has come out of the trade."Most importantly, the earnings outlook remains robust: "Consensus still sees mid- and small-cap EPS growing in the high-teens for FY26." ADVERTISEMENT Also Read | Nifty breaks out of 31-day consolidation cage. Will stock market hit record high this week? But not everyone is convinced the small-cap revival will sustain. Amit Jain, Co-Founder of Ashika Global Family Office Services, remains deeply cautious about the broader market surge."Despite the recent bounce, we remain cautious on the smallcap and midcap space heading into H2," Jain warned. "This rebound has been driven more by liquidity than fundamentals. Valuations in many pockets remain stretched, and earnings upgrades have not kept pace with price action."His concerns run deeper than valuation: "Moreover, broader market participation is thinning, and concentration risk is high. The rally has largely bypassed companies with weak balance sheets or inconsistent cash flows, which still make up a large portion of the smallcap universe."The warning is stark: "Unless earnings catch up meaningfully or we see strong policy tailwinds, the risk-reward for fresh entry into this segment looks limited."As markets gear up for the next phase, clear sector winners are emerging from the are leading the charge. "Lower policy rates and relaxed provisioning norms boost credit growth; PFC and REC leapt ~4% when the RBI's new rules landed, and PSU-bank indices hit six-month highs," Jonagadla concurs: "Lower interest rates are helping banks and NBFCs. Credit growth remains strong, and asset quality is stable."Capital goods and infrastructure companies are riding a government spending wave. "Order books are overflowing—L&T reported a record ₹1 trillion intake in Q4 FY25—underpinned by ongoing central and state capex," Jonagadla consumption revival is also gaining steam. "Rural demand is improving, and urban consumption is steady. FMCG, two-wheelers, and discretionary segments are showing healthy trends," Appala explained, pointing to improving "sales of two-wheelers, tractors, and FMCG products."However, selectivity will be key. "Export-oriented pharma and chemicals could lag amid U.S. tariff noise, and defensives look fully valued," Jonagadla geopolitical tensions that continue to inject volatility into global markets, Indian benchmarks remain "relatively resilient," according to Jain, who sees potential for "further upside toward 26,500–27,000 in the coming months."For small and midcap investors specifically, Jonagadla offers measured optimism: "H2 should show better absolute returns than H1, yet dispersion will stay wide, rewarding bottom-up quality screens."Appala's roadmap is clear: "There are good reasons to believe so. Inflation has cooled, the RBI has started cutting rates, and rural demand is recovering. These tailwinds support a more positive setup for smaller companies. However, valuations in this space remain expensive. Stock selection will be important."His final advice captures the moment perfectly: "The first half of the year was largely driven by large-cap resilience. But the broader market is now gaining traction. With improving macros, better earnings, and steady inflows, the second half could offer opportunities — especially in sectors linked to India's growth story."The stage is set for a potential small-cap boom—but as always in markets, the devil will be in the details. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
11 hours ago
- Business
- Time of India
6,000-point Sensex rally overshadows market's real story: Smallcaps are staging a revolt
India's stock market is poised for a dramatic shift as the second half of 2025 beckons. With the Sensex already soaring 6,000 points in 6 months and sitting just 2,000 points shy of record highs, all eyes are turning to whether smallcaps can finally steal the spotlight from their largecap cousins The benchmark Sensex has surged about 8% in the first half of 2025, showcasing remarkable largecap resilience that has propelled Indian equities toward potential new peaks. But beneath this headline-grabbing performance lies a tale of two markets: while bluechip giants have dominated, the BSE Smallcap index remains stubbornly down 1.7% year-to-date and midcaps have barely managed to stay flat. Now, with momentum shifting dramatically in recent months, market veterans are asking the burning question: Could the second half belong to the smallcap universe? The most aggressive bulls are already sketching out a path to historic highs. Karthick Jonagadla , Founder & CEO at Quantace Research , has set jaw-dropping December-end targets that would shatter all previous records. "We peg December-end targets of Nifty 26,500 and Sensex ~95,000, implying mid- to high-single-digit upside from current levels and new peaks well before calendar year-end," Jonagadla declared, backing his bold prediction with three powerful catalysts. His confidence stems from the RBI's aggressive monetary easing. The RBI's front-loaded 50 bps cut in June takes the repo rate to 5.50% and signals a neutral stance, combined with record-breaking retail flows where SIP contributions hit another record Rs 26,688 crore in May and have stayed above Rs 20,000 crore for ten straight months. Also Read | Rs 1 lakh crore selloff tsunami threatens Nifty rally as promoters, strategic investors exit The foreign money is flowing back too: "Foreign investors returned with about $5.5 billion of block-trade buying in May alone." FIIs have been net buyers in all the last 4 months. The real story lies in the dramatic smallcap turnaround that's reshaping market dynamics. After months of brutal punishment, smaller companies have staged what can only be described as a spectacular comeback. "Smallcaps have staged a strong comeback. The BSE Smallcap index rose more than 20 percent in the second quarter. Midcaps also recovered. Momentum is building in the broader market, driven by improving fundamentals and stronger flows," Krishna Appala , Fund Manager at Capitalmind PMS said, highlighting the explosive reversal that caught many by surprise. Jonagadla sees this as just the beginning: "Three forces should keep that tailwind alive in H2. Liquidity is turning supportive. Policy rates are falling just as earnings momentum broadens. Valuations have cooled." The technical picture has improved dramatically: "After the Q1 sell-off, the Nifty Smallcap 250 now trades a little below its 5-year median PE; profit-taking in June shows froth has come out of the trade." Most importantly, the earnings outlook remains robust: "Consensus still sees mid- and small-cap EPS growing in the high-teens for FY26." Also Read | Nifty breaks out of 31-day consolidation cage. Will stock market hit record high this week? The Great Smallcap Debate But not everyone is convinced the small-cap revival will sustain. Amit Jain, Co-Founder of Ashika Global Family Office Services, remains deeply cautious about the broader market surge. "Despite the recent bounce, we remain cautious on the smallcap and midcap space heading into H2," Jain warned. "This rebound has been driven more by liquidity than fundamentals. Valuations in many pockets remain stretched, and earnings upgrades have not kept pace with price action." His concerns run deeper than valuation: "Moreover, broader market participation is thinning, and concentration risk is high. The rally has largely bypassed companies with weak balance sheets or inconsistent cash flows, which still make up a large portion of the smallcap universe." The warning is stark: "Unless earnings catch up meaningfully or we see strong policy tailwinds, the risk-reward for fresh entry into this segment looks limited." Sector Sweet Spots for the Second Half As markets gear up for the next phase, clear sector winners are emerging from the pack. Financials are leading the charge. "Lower policy rates and relaxed provisioning norms boost credit growth; PFC and REC leapt ~4% when the RBI's new rules landed, and PSU-bank indices hit six-month highs," Jonagadla noted. Appala concurs: "Lower interest rates are helping banks and NBFCs. Credit growth remains strong, and asset quality is stable." Capital goods and infrastructure companies are riding a government spending wave. "Order books are overflowing—L&T reported a record ₹1 trillion intake in Q4 FY25—underpinned by ongoing central and state capex," Jonagadla said. The consumption revival is also gaining steam. "Rural demand is improving, and urban consumption is steady. FMCG, two-wheelers, and discretionary segments are showing healthy trends," Appala explained, pointing to improving "sales of two-wheelers, tractors, and FMCG products." However, selectivity will be key. "Export-oriented pharma and chemicals could lag amid U.S. tariff noise, and defensives look fully valued," Jonagadla cautioned. The Second Half Playbook Despite geopolitical tensions that continue to inject volatility into global markets, Indian benchmarks remain "relatively resilient," according to Jain, who sees potential for "further upside toward 26,500–27,000 in the coming months." For small and midcap investors specifically, Jonagadla offers measured optimism: "H2 should show better absolute returns than H1, yet dispersion will stay wide, rewarding bottom-up quality screens." Appala's roadmap is clear: "There are good reasons to believe so. Inflation has cooled, the RBI has started cutting rates, and rural demand is recovering. These tailwinds support a more positive setup for smaller companies. However, valuations in this space remain expensive. Stock selection will be important." His final advice captures the moment perfectly: "The first half of the year was largely driven by large-cap resilience. But the broader market is now gaining traction. With improving macros, better earnings, and steady inflows, the second half could offer opportunities — especially in sectors linked to India's growth story." The stage is set for a potential small-cap boom—but as always in markets, the devil will be in the details. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
