WhiteOak CIO Favors India Small-, Mid-Caps on Earnings

Hiren Dasani, chief investment officer for emerging markets at WhiteOak Capital, is shifting exposure toward Indian small- and mid-cap stocks. The catalyst is a combination of stronger earnings delivery, recent price corrections, and improving valuations that make the segment more attractive than large-caps, Dasani said in a research note.

Why Small- and Mid-Caps Now

The bet rests on three pillars that the source explicitly names:

• Earnings strength – Companies in the small- and mid-cap space have delivered better-than-expected operating results, providing fundamental support.
• Price corrections – Recent drawdowns have lowered entry points, creating a better risk-reward profile relative to the recent highs.
• Improving valuations – The ratio of price to forward earnings has compressed enough to offer margin of safety versus large-cap peers.

Dasani is not arguing for a broad market call. The preference is relative: small- and mid-caps over large-caps within India's equity complex.

Affected Assets and Flows

Direct exposure comes through small-cap and mid-cap equity indices, as well as active funds that lean on these segments. Foreign portfolio investors have been net buyers into Indian equities this year, and a shift toward smaller names could amplify those flows. The Indian rupee also absorbs some of this capital-flow pressure, though the Reserve Bank of India has historically sterilised large moves through intervention. For a deeper analysis of that dynamic, see INR Finds Floor From RBI Intervention and Rate Repricing.