Sensex firms beat mid-caps in earnings

Sensex firms' earnings grow 22% in current rally, twice as fast as those of firms in mid-cap index

The mid-cap rally on Dalal Street seems to be treading on thin ice. The BSE Midcap index is up 169 per cent since September 2013, when the current rally began, outperforming the benchmark BSE Sensex by a factor of nearly three, but it is not supported by the underlying fundamentals.

Contrary to popular perception, mid-cap companies reported slow earnings growth compared with the Sensex companies during the period.

The underlying earnings per share (EPS) of the 30 Sensex companies is up 20 per cent during the period, outpacing mid-caps, which have reported cumulative EPS growth of five per cent.

The Sensex companies’ underlying