New Delhi: The sharp outperformance of small and midcaps in 2023 has led to valuations becoming a challenge now, foreign brokerage Jefferies said in a report. At 27x 1-year fwd PE, the Nifty Midcap100 index trades at 35 per cent premium to its average valuations, vs a less than 20 per cent premium for the Nifty 50. “This makes the SMIDs susceptible to a sharp sell-off. We believe that the Budget/approaching elections may disappoint on govternment capex, creating a possible trigger for sell-off in parts of the SMID universe, particularly among industrials, select PSUs etc.,” the report said. After a 25-35 percentage point outperformance by mid/smallcap indices, 2024 could start with a bias
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