The markets recently have been showing a lot of rallies in the broader markets, with small and midcaps outperforming the large caps and index movers. (Barring reliance)
If we see the rally post Jan 2018 correction, there was no participation from small and midcaps all throughout 2019 and early 2020.
Then came the catharsis of March 2020 when all small cap bulls were washed away and no one was ready to buy them. Everyone wanted safety in quality names, mainly those with brands and moats etc. That has sown the seeds of a strong rally in small and midcaps and those that kept faith in that segment and picked up companies that were likely to deliver good numbers going ahead have been rewarded handsomely.
Some companies I track and own even after the run up do not seem too expensive. Something like alembic could report 65-70 rs eps, and with qip overhang out of the way, seems reasonably valued at 16 PE. Here the concern is sartans over dependence, maybe rightly or wrongly, only time will tell.
Similarly, laurus, if it continues momentum shown in q1, for next few quarters can report good numbers and again at around 15-16 pe and a strong demand scenario seems ok.
Same thing with a lot of other small and midcaps where earnings momentum has returned but price is just about beginning to catch up.
A lot of cyclical stocks were beaten out of shape, and therefore rallied to reach fair values.
So although the markets do seem frothy, with small and midcaps running hard, maybe there might be some steam left.
I am fully invested, but would be on the lookout for too much froth to make any decisions to exit. The only worry I see is last time I saw strong moves in small and midcaps was in 2017 and then 2018 happened, which depressed sentiments in the segments for 2 whole years.
I dont track guj gas too closely. Alkem numbers are very good, but need to listen to concall to guess the way forward.