Citigroup Global Markets has retained a cautious view on midcap stocks as they are still trading at a premium to large-caps despite the recent correction.
Reversing the trend seen in the last three years, mid-caps have underperformed large-cap indices so far this year. The BSE MidCap index has fallen 11.7 per cent so far in 2018, while the Sensex is up 1.7 per cent for the year. From its all-time high level of 18,321.37 which has hit on January 9, the MidCap index has fallen 14 per cent. Yet, the BSE MidCap index is trading at a price-to-earnings ratio of 46.5 times on a trailing basis while the Sensex is trading at 22.4 times.
