Valuations still stretched, real opportunity emerging in small,microcaps: Venkatesh Balasubramaniam

JM Financial’s Venkatesh Balasubramaniam says Indian equity valuations remain stretched despite recent correction, with real opportunities emerging gradually in smallcaps and microcaps. He advises staggered investing over 6–12 months, expects limited upside from largecaps in 2026, sees Budget as non-market-moving, and prefers consumer, auto, NBFC, hotel and real estate stocks while staying cautious on banks, IT, utilities and pharma.