Risk around earnings growth is higher for midcaps, says HDFC Life

On the earnings front, Gajri said, “There is enough opportunity available in the large-cap space. So there are enough stocks which are reasonably priced and giving you good earnings growth over the next 12-24 months and they are among the largecaps. So very clearly at this point of time, we are also not focusing very significantly on the deep value midcaps. Finding deep value midcaps is a challenge, but midcaps which have corrected from the top, I think the focus has to be clear where the earnings growth is likely to come and what is the risk around that earnings growth. So risk around that earnings growth will always be higher for midcaps and therefore at this point of time, we are a little bit away from midcaps and biased towards large caps. However, as and when the volatility recedes, as and when some more credibility around that earnings growth number returns, I think the bias may shift.”