Small-cap stock corrections in India have narrowed to 25% since the Covid-19 pandemic, reflecting improved market resilience, Samir Vartak, founder and chief investment officer of SageOne Investment Managers, said in an interview. He highlighted that this reduction in volatility marks a significant shift from pre-pandemic levels, driven by stronger fundamentals in the small-cap segment, according to livemint.com.
Vartak attributed the improved performance to cleaner balance sheets among small-cap companies, stronger earnings growth, and increased demand led by the manufacturing sector. These factors have collectively enhanced the ability of small caps to withstand market pullbacks that previously caused sharper corrections. The insights were shared during a detailed discussion on market trends and investment outlooks hosted by livemint.com.
The narrowing of corrections in small-cap stocks is notable given their historical volatility and sensitivity to economic cycles. Compared to earlier years, the current environment shows a more robust foundation for these companies, which could attract increased investor interest. This development contrasts with the wider market fluctuations seen during the pandemic and aligns with broader recovery trends in India's equity markets.
SageOne Investment Managers continues to monitor these trends closely, with Vartak emphasizing the importance of manufacturing-led demand in sustaining growth. The next quarterly earnings season will provide further clarity on whether these resilience factors persist across the small-cap universe, as reported by livemint.com.