'Midcap stocks might play catch-up soon'

In a chat with ET Now, Seshadri Bharathan, MD & CEO, KSEMA Fincon Ltd., talks about the outlook of Edelweiss and Motilal Oswal.

What's your view on Edelweiss and Motilal Oswal?

Primarily, capital market activity has picked up and of late we have been seeing lot of merger & acquisitions and merchant banking deals. People are expecting good quarter results from all the broking houses, be it India Infoline, Edelweiss and Motilal Oswal. Other thing is that at the peak of markets, these stocks you should trade around multiple of around 40 to 50 times which have cooled off to around 15 to 18 times for most of these companies. While we have seen that large cap stocks have now corrected by around 15% from the peak, most of these midcap stocks trade around 15% to 25% lower than what their peak used to be in 2008. So, at some point of time, there might be some catch up happening in most of these midcap stocks.