Realty, consumer services, capital goods see biggest m-cap expansion in 5 years

Media, FMCG Auto and IT has lagged the broader trend

Real Estate, Consumer Services, and Capital Goods have experienced the largest market cap expansion over the last five years, while Media, FMCG, Auto, and IT have lagged behind the broader market trend, showed data analysed by Yes Securities.

The brokerage examined a notable decline in the share of mid-caps in India Inc earnings, contrasting with the concurrent surge in the share of mid-caps and small-caps in the NSE 500 Market Cap. This indicates a potential upcoming underperformance of the mid-cap segment relative to large caps. 

Share of Mid-Caps in India Inc Earnings has seen a fall

 Share of Mid-Caps and Small-Caps in the NSE 500 Market Cap is conversely at an all-time high

 

 "The declining share of mid-caps in India Inc earnings and increasing market cap of mid-caps and small caps in the NSE 500 could imply a shift in investor sentiment and risk appetite towards these segments. ..Quantitative analysis supports the notion that the current rally in mid-caps is stretched and due for a pullback. The ratio of mid-cap to largecap and small-cap to large-cap has surpassed the positive 2nd standard deviation, signaling an overextension in the market. This suggests that investors may be overly optimistic about mid-caps, and a correction in their prices is likely in the coming period," said Hitesh Jain, lead analyst at Yes Securities. 

 On a positive note, the share of loss-making companies across all market segments is decreasing. This could be an indication of improved overall market health and financial stability. However, sector-wise analysis reveals distinct trends.