Latest rebound in mid-cap stocks could sustain, revival on the cards: Elara

The latest jump in shares of the smaller companies comes after a year of sharp underperformance

The latest rebound in mid-cap stocks could sustain as valuations are compelling, and a revival in on the cards, Elara Capital said in a note. According to the brokerage, the valuation gap between large-caps and mid-caps had recently dropped to historically low levels, making the latter attractive bets.

“We believe the valuations are compelling at these levels for a revival in the performance of mid-cap stocks, particularly the quality mid-caps, which have taken a substantial beating,” said Ravi Muthukrishnan, head of research, Elara Capital in the note to investors.

On Wednesday, the mid- and small-cap stocks extended their gains with