According to CNBC TV18, fund managers are identifying significant value opportunities in large-cap stocks that have underperformed the market. V Srivatsa of UTI AMC highlighted that large-cap names are available at 4-6% dividend yield and similar free cash flow yields. As reported by CNBC TV18, Srivatsa acknowledged near-term challenges including pressure from top clients and deflation, but believes modest spending and revenue growth over the next 3-4 years could lead to meaningful outperformance given current rock-bottom valuations.
Chintan Haria of ICICI Prudential AMC emphasized that large caps offer attractive opportunities through three key factors: underperformance, undervaluation, and under-ownership. According to CNBC TV18, large caps are currently trading at less than 10-year valuations while money continues flowing into mid- and small-cap stocks. George Joseph of ASK Investment Managers noted that foreign institutional investor selling had been the biggest drag on large-cap performance, but that selling pressure has now eased, with India's positioning within emerging markets improving and currency remaining reasonably stable.
Fund managers are targeting specific large-cap segments that have lagged the market while maintaining attractive valuations. Sanjay Parekh of Sohum Asset Managers noted that some large caps are 7-8% down and available at reasonable valuations, with opportunities in telecom and banking sectors. Joseph of ASK Investment Managers sees particular opportunities in private banks, IT, and pharma sectors. For earnings potential, Haria pointed to consumer and technology companies, large energy companies, and cash-rich IT companies that can benefit from artificial intelligence adoption.
According to CNBC TV18, fund managers are avoiding large-cap segments that have already delivered strong outperformance and attracted significant investor ownership, including metals, defence, capital goods, and power sectors. The broader message emphasizes that investors should not equate large size with safety, with stronger opportunities lying in finding companies where valuations have fallen faster than the underlying business. As reported by CNBC TV18, the focus remains on large companies that generate strong cash flows and dividends while trading at relatively low valuations.
