According to PL Asset Management, the asset management arm of PL Capital Group (Prabhudas Lilladher) ‘PMS Strategy Updates and Insights’ report, Indian markets posted modest gains relative to global peers, with strong breadth as mid and small caps outperformed, driven by robust gains in cyclical sectors, especially defense. The report highlights India’s ongoing macroeconomic strength, with robust tax collections, easing inflation, strong PMI performance, and rising foreign exchange reserves supporting the country’s growth trajectory.
Mr. Siddharth Vora, Head – Quant Investment Strategies & Fund Manager, PL Asset Management and Executive Director, PL Capital – Prabhudas Lilladher said, “India’s resilient macroeconomic landscape, coupled with improving global sentiment, presents a constructive backdrop for equity investors. AQUA’s adaptive quant approach continues to navigate this evolving environment by dynamically aligning with sectoral and factor trends to optimize risk-adjusted returns.”
The Indian equity markets, despite moderate gains in large-caps, saw clear signs of recovery in May. Large-Caps delivered modest gains, with the Nifty 50 up 1.7% to near 24,800 amid selective buying and profit booking in IT and financials. In contrast, Mid and Small-Caps outperformed, with the Nifty Midcap 150 up 6.5% and Smallcap 250 rising 9.5%, driven by retail flows and cyclical rotation on improving domestic data.
PL Asset Management highlights broader market participation in May, as the Nifty 50 Equal Weight rose 2.31%, Nifty 500 gained 3.5%, and the Nifty 500 Equal Weight Index surged 8.5%, led by strong consumer stocks. A widening 1M–12M outperformance spread and a rising share of stocks near 52-week highs underscore a broadening upswing.
Valuations firmed as Nifty’s PE rose to 22.3x and PB to 3.6x, reflecting price catch-up. While mid- and small-cap valuations stayed above 5-year medians, they remained within 1-year bands, suggesting normalization. Over 50% of mid- and small-caps now trade above their 5-year average PEs, while large-cap valuations remain earnings-aligned.
