Midcaps and smallcaps currently offer more disproportionate growth opportunities than largecaps: Deepak Shenoy

Capitalmind's Deepak Shenoy said India's medium-term economic outlook remains strong, with banking system credit growth at 18%, the highest in over a decade, driven largely by industrial capex. He favours midcaps and smallcaps over largecaps for disproportionate growth and expects asset-heavy sectors such as manufacturing, defence, and infrastructure to lead the market over the next 5-10 years. He also cautioned that large private banks are unlikely to return to historical valuation multiples of 3-4 times book value, projecting a more realistic range of 2 to 2.5 times due to margin compression and intensifying competition from PSU banks.