Mid, small-caps underperform large-caps in H1 as investors run for cover

Market experts believe that small-caps hold promise from a long-term perspective, provided investors do their homework diligently

Small and midcap indices underperformed their frontline peers in the first half of calendar year 2025 (H1CY25), falling 1.7 per cent in BSE Smallcap and a marginal 0.2 per cent rise in BSE Midcap index. The Sensex and the Nifty moved up 8 per cent each.

  Analysts said small and midcaps underperformed (SMIDs) in H1CY25 due to US tariff decisions, geopolitical concerns, and tepid corporate earnings in the December 2024 quarter (Q3FY25). These events made investors run to the safety of largecaps, regarding them as a safer bet in choppy markets.

  However, March quarter earnings (Q4FY25) and ensuing