INSUBCONTINENT EXCLUSIVE:
In uncertain markets, analysts and fund managers usually advise steering clear of most mid- and small-cap shares
The logic is that larger companies are in the best position to withstand a downturn; and whenever the market recovers, blue chips are the
first to rebound.
But, there are some mid- and small-cap companies that are better equipped than their peers to withstand a slowdown
These companies have market leadership, strong balance sheets with good cash flows, sound capital allocation strategy and higher recovery
Exide Industries, AIA Engineering, Bata, PI Industries, TCI Express, among others
manufacturing theme, which has not worked in favour of investors, has the potential to create a lot of wealth over a period of time for
smallcap stocks having positive net cash as percentage of market capitalisation, return on capital employed (ROCE) of over 15% for FY19 and
price-to-earnings ratio below their five-year average levels.
