A rate hike expectation should have taken the valuation below its historical average, as the earnings growth for the Nifty 50 has been below the historical average, says Khemka.
Shriram Finance, Union Bank of India, Indian Overseas Bank, Rural Electrification and Power Finance are the other stocks in pole position to make it to the large-cap universe
As economic growth bottoms out, liquidity stays benign, corporate earnings pick up and risk aversion diminishes, we expect the valuation discount of mid-caps to narrow vis a vis large-caps in CY20