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Smallcap valuations mixed, earnings visibility key; bullish on lending, healthcare, says Mirae Asset's Varun Goel
Smallcap valuations mixed, earnings visibility key; bullish on lending, healthcare, says Mirae Asset's Varun Goel

Mint

time7 hours ago

  • Business
  • Mint

Smallcap valuations mixed, earnings visibility key; bullish on lending, healthcare, says Mirae Asset's Varun Goel

Valuations in the small-cap segment are not uniform, with some stocks appearing expensive while others continue to offer attractive entry points, says Varun Goel, Senior Fund Manager at Mirae Asset Investment Managers (India). In an interview with Livemint, Goel shares his outlook on the Indian stock market against the backdrop of global geopolitical uncertainty and explains why he remains optimistic about a growth rebound in FY26. He also offers insights into the sustained investor interest in small-cap funds, sectoral preferences, and why Mirae prefers staying fully invested rather than sitting on cash during volatile times. Edited excerpts: FY26 should be the year for growth rebound for India. We expect that significant monetary easing, tax cuts and good agricultural production and strong recovery in central government capex spending should lead to recovery in GDP growth and corporate earnings. Geopolitical tensions — whether stemming from trade disruptions, regional conflicts, or energy market instability — are undoubtedly contributing to near-term volatility. However, when we move past the headlines, the Indian growth story continues to look promising. Credit growth and corporate earnings should recover, and infrastructure-led capex is gathering momentum. In our view, this is a time to stay engaged and build portfolios with structural resilience. Small-caps are inherently more volatile, and sharp corrections are part of the cycle. Historical trends show that when macro and sentiment-related headwinds ease, this segment tends to rebound strongly. We are focusing on smallcap businesses that have robust earnings visibility, prudent balance sheets, and scalable business models. Over a 3–5 year horizon, these can emerge as meaningful compounders. These inflows in smallcap mutual funds suggest a maturing investor base that is more aligned with long-term investing. A large part of these flows is driven by systematic investment plans (SIPs), where investors continue to participate despite short-term volatility. This is a healthy development. Rather than reacting to market noise, investors are treating corrections as opportunities. Often, such disciplined participation can lay the foundation for stronger long-term outcomes — especially in the smallcap space, where recoveries can be sharp. Valuations in the smallcap segment are not uniform. While some areas are definitely trading at stretched levels, others still offer attractive entry points. One should avoid getting carried away and chasing overheated stories. We take a bottom-up view — valuation is justified only when it's backed by strong fundamentals such as earnings growth, capital efficiency, and a clear path to scalability. Selectivity is crucial in this phase. We remain constructive on the lending space. The significant monetary easing carried out this year should lead to healthy growth for small banks, SFBs and NBFCs. The healthcare segment is geared towards healthy medium term compounding with hospitals and diagnostics space seeing a strong shift from unorganized to organized. Also, we see secular growth opportunities in CRAMS (contract research and manufacturing) space. The portfolio is more geared towards capturing domestic economic recovery stories in BFSI, Auto, Capital goods and manufacturing and cautious on export segments. At Mirae Asset, we don't believe in holding large amounts of cash as a strategic stance. We prefer to remain fully invested in high-conviction ideas. Sitting on the side lines risks missing out on quality opportunities that often emerge during periods of dislocation. In the smallcap universe, fund size can influence operational flexibility. Smaller funds are typically more agile in building meaningful positions in emerging companies where liquidity is tight. That said, efficiency is not purely about size — it's about the robustness of the investment process. What matters is the quality of research, portfolio construction, and risk management. Ultimately, it is the consistency and discipline in execution that drive outcomes — not just fund size. Read all Stock Market news here Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

How could China step in after Iran's nuclear setback following US strikes? Experts weigh in
How could China step in after Iran's nuclear setback following US strikes? Experts weigh in

Mint

time5 days ago

  • Politics
  • Mint

How could China step in after Iran's nuclear setback following US strikes? Experts weigh in

In a surprise attack, the United States struck Iran's nuclear facilities — Natanz, Isfahan and Fordow — on Saturday night. Slamming the attack, China said it has damaged the US's credibility, warning the situation 'may go out of control', according to its state broadcaster. Experts have weighed in on Beijing's role as Tehran suffers a serious setback to its nuclear programme. China's UN Ambassador Fu Cong said parties should contain the 'impulse of force, avoid exacerbating conflicts and adding fuel to the fire', particularly Israel 'should immediately cease fire to prevent the situation from escalating and avoid the spillover of war'. Iran was impacted 'but the United States' credibility was also damaged - both as a country and as a participant in any international negotiations,' he said. In a statement exclusively to Livemint, former Israeli intelligence official Avi Melamed said, 'At this stage, it can be assessed that Iran's military nuclear programme has been significantly set back, though not entirely dismantled.' He believes Beijing is expected to pressure Iran to de-escalate. Melamed opined, 'The Iranian regime now faces two paths, both of which it perceives as choosing the lesser of two evils. One option is to continue the military confrontation. The other is to return to the negotiating table. The distinction is critical: the military path would dramatically escalate the threat to the regime's survival, while a negotiated path—though requiring the regime to swallow a bitter pill and accept conditions it once refused to even discuss—could allow it to preserve a core power base and maintain its grip on power.' He added, "In this context, China's role is worth watching closely. It is likely that Beijing will exert quiet but deliberate pressure on Iran to de-escalate and resume negotiations. In either scenario, a period of intense internal turbulence within the regime is expected, with consequences that remain unclear at this time.' Senior Analyst at the Renmin University of China, Zhou Rong said, "In the war between Russia and Ukraine, Foreign Minister Wang Yi was very clear that China stood with peace and not with either side. So this time, whether it's Israel or Iran, China's position remains the same,' according to The National News. 'China will do its best to promote peace in the region. It will act within its capacity. We will do more to support Iran, morally, but no one – not China or any other country – can stop Israel's attacks. All we can do is try to form a united front against Israel's aggressive behaviour and help Iran with some level of resistance. But even then, China still hopes to stop the war between the two sides," Zhou further remarked. Meanwhile, Guo Jiakun, a spokesperson for China's foreign ministry, mentioned that the Chinese citizens in Iran who were showing readiness to leave had all been evacuated to safe areas. As many as '3,125 Chinese citizens have been safely evacuated from Iran' with the help of China's foreign ministry, the Chinese embassy in Iran and other authorities, Jiakun informed. While Israel's UN Ambassador Danny Danon said the world must ensure Iran does not become a nuclear threat again, US Secretary of State Marco Rubio urged China to stop Iran from closing the Strait of Hormuz. 'I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Strait of Hormuz for their oil. If they do that, it will be another terrible mistake. It's economic suicide for them if they do it,' Fox News quoted Rubio as saying. He added, "If they [close the Strait]... it will be economic suicide for them. And we retain options to deal with that, but other countries should be looking at that as well. It would hurt other countries' economies a lot worse than ours."

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