The CNX midcap Index has underperformed the broader market by almost 18-20 percent due to sluggish demand, high interest costs and cost pressures. We expect these factors to ease in the coming year. Midcaps are trading at a discount of about 20 percent to large caps. With better earnings growth and the valuations gap closing, we expect them to perform better. We also expect the consumption cycle to continue on the back of strong rural demand.
Sanjay Chawla,
CIO, Baroda Pioneer AMC
(This story appears in the 29 November, 2013 issue of Forbes India. To visit our Archives, click here.)