In general when I have seen something like this, it means there’s a lot of expectations which aren’t being met and only surprises (like stellar growth even QoQ for eg.) are respected. Everyone is keen on booking profits. I have been a bit late but looks like there will be more chance today to reduce exposure on expensive names and look for fresh ideas over next few months.
If I remember right, when I went from 20% to 100% invested in July, it was just before earnings and pretty much every result that came out - from VBL to IDFC First to Devyani was cheered and there were very quick moves. That tells there’s no expectation in the price. Due to the big runup now, though the numbers have been equally good, there’s simply no respect.
This might just be temporary weakness and some of these names with high expectations could go through extended consolidation (for 3-6-12 months), similar to what Polymed went through or many of the names with big runup last year.
Global markets are rebounding bigtime post CPI numbers but I would prefer to stick to the stance until ATHs are made on the indices which isn’t much further away - If there is strength and sustenance above ATH and there are good stock setups, there will be sufficient time to scale up new positions. There are a lot of microcaps which have been punished and could make for good entries.
Disc: I will still hold these consumption names (Devyani, Metro, Manyavar) but at a normal allocation (~5%) than what I had (~15%). I am not pessimistic on these businesses in the long term. I still hold VBL for the growth there is stellar. I feel few microcaps like Vimta probably offer better risk:reward.
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