After any election, if the sentiments turn out to be good, it is the small and mid caps which tend to outperform the large caps in the near to medium term and we do believe that the same pattern will be followed this time as well. In our note dated May 13, 2014, we had recommended investors to remain underweight in defensive sectors like IT and Pharma and FMCG while remaining overweight in Financials, automobiles, capital goods and materials. We reiterate the view mentioned on May 13, 2014. We also believe that investors need to more look into many of the mid cap stocks within these sectors as we expect to see a valuation expansion for the mid caps in these sectors as these sectors are going to be the biggest beneficiary of a economic growth.
