From ACC to L&T Finance, mid-cap shares may be in line for a comeback

India's economy is forecast to slow further to 6 per cent growth this year, following a deceleration in 2018, according to economists surveyed by Bloomberg

Smaller companies have earned another look after suffering through some two years of underperformance relative to their larger peers.

The divergence between the two groups is “significant” compared with longer-term historical correlations, according to Citigroup. The MSCI India Mid-Cap Index has lost 17 per cent in the past two years, while the benchmark S&P BSE Sensex has gained more than 20 per cent.

“With better risk-reward post underperformance, we would selectively look to add mid-caps,” Citi analyst Surendra Goyal wrote in a note this week. 

“Valuation discount of mid caps versus large caps is close to 10-year highs, highlighting the improved risk-reward and