Next big market surprise likely to be upward

The market fall has created a favourable investment landscape, even as investor mood remains subdued, says MUKUL KOCHHAR, head of institutional equities, Investec India. In an email interview with Samie Modak, Kochhar says the most reliable investment approach centres around selecting mispriced stocks and holding them for the long term. Edited excerpts:

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Has the market turned attractive post the selloff?

When market sentiment weakens, valuations often reach more attractive levels. We recently hosted our annual promoter and founder conference, facilitating approximately 6,000 investor meetings across more than 100 companies. The prevailing mood among both companies and investors was notably subdued. Despite this, we believe the recent market correction has created a favourable investment landscape. The Nifty's forward multiple, currently at around 17x, sits slightly below its long-term average, signalling reasonable valuations.

However, even after the correction, the NSE Midcap index trades at a 38 per cent premium to the Nifty, near the upper end of its historical range. While aggregate midcap valuations appear elevated due to pockets of overvaluation, we continue to identify compelling stock-specific opportunities within this segment.

Do you expect a sharp recovery seen in the recent past or will the market take time to recoup losses this time?