Small-Cap Rally Durable, More Upside on Fundamentals & Liquidity: Bajaj Finserv AMC

• Nimesh Chandan of Bajaj Finserv AMC states the small-cap rally is durable with significant upside, driven by fundamentals and fresh liquidity.
• He notes positive shifts in economic, profit, and credit cycles, with improved sentiment following trade deals.
• Small caps showed over 30% earnings growth this quarter, outperforming large (12%) and mid-caps (14%), though sustainability needs context.
• Improved consumption, better exports due to FTAs, and lower capital costs contribute to a better market position than the last 12 months.
• Bajaj Finserv AMC finds opportunities in materials (cement, metals, chemicals), consumer discretionary, and industrials (capital goods, power), while remaining cautious on IT.