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Small-cap firms expected to underperform in 2026 due to valuation and earnings concerns.
Summary
Analysts predict continued underperformance for Indian small-cap firms in 2026 due to high valuations, modest earnings, and limited liquidity. This follows a period of strong growth, making it a crucial topic for understanding market trends.
Key Points
- Small-cap firms underperformed compared to large- and mid-caps this year.
- Analysts anticipate this trend to continue into 2026.
- Key factors include stretched valuations, moderate earnings, and thin liquidity.
- The article discusses market trends and financial performance of different market capitalization segments.
Full Article
The underperformance of India's small-cap firms relative to large- and mid-caps this year, after two years of strong gains, is likely to persist into 2026 as stretched valuations, moderate earnings and thin liquidity continue to weigh, analysts said.
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