Sumary of This decade-old smallcap PMS fund is crushing its competition:
- While the largecap benchmark, the Sensex, climbed nearly 10 per cent during August, BSE Midcap and BSE Smallcap teetered close to being flatlined.
- “It’s critical to not lose sight of the fact that smallcaps, in general, and several institutionally under-owned names, in particular, saw an extended period of material multiple compression getting into FY22. This recent, somewhat violent recoil should be viewed in that context,” he told ETMarkets.
- “We prefer asymmetrically valued situations and don’t mind waiting for long periods.
- But the question is, given the sharp rally in smallcap space, can it continue to deliver?
- “Our median holding trades at around 12.5x FY22 EBITDA, or at 15-20 per cent discount versus the median Nifty 50 and Nifty Smallcap 50 component, despite clearly better earnings traction,” he said.
- “We believe that our current book has appreciably more value to be captured because our holdings have created value from sustainable underlying earnings growth versus despite a distinct lack of it elsewhere.