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Showing posts with label BSE Mid Cap Index. Show all posts
Showing posts with label BSE Mid Cap Index. Show all posts

Wednesday, June 19, 2019

Are you Fearful of Market Crash? Its time to be Greedy!

Dear Reader,

Since Jan 2018, broader markets i.e. Small Cap and Mid Cap indices are in bear phase. Over last few weeks, we have seen small & mid cap stocks getting butchered with fall in stock prices on almost daily basis. At current scenario, when Small & Mid Cap Index is down by 31% and 21% respectively from their peak made in January last year and significantly underperformed Sensex & Nifty, no body want to touch this space. Most of the liquidity in small & mid caps has dried up and found its way to large caps over last 16 months. At this juncture, large caps looks fairly valued or expensive in terms of valuations, however small & mid cap companies look attractive and can reward long term investors in big way. In fact, some of the worst times to get into the market turned out to be the best times for long term investors and same seems to be applicable now for small & mid caps.

Its always wise to be greedy when others are fearful. Fall in stock prices of small and mid cap companies by 40% to 60% from their peaks use to happen during panic times, if a particular company delivers 3x to 5x or even 10x type of returns on your investments in period of 3 to 7 years, it can easily fall by 40% to 60% or even more from its 52 week high during tough times which arises due to profit / loss booking, series of negative events / news flows and severe sell off due to panic across markets. Below are some of the major reasons of severe fall in stocks prices of small & mid cap stocks since beginning of 2018:

i) Rejig in Portfolio by Mutual Funds to meet guidelines defined by SEBI
ii) Introduction of Additional Surveillance Measures by SEBI to curb volatility
iii) Auditors exit from various companies on fear of stringent action from authorities
iv) Unfavourable macros with increasing crude oil prices and depreciating rupee
v) Trade war fears between US and China, rising interest rates, continuous selling by FIIs
vi) Panic in market due to IL&FS default on debt repayments
vii) Concerns in market due to severe sell off in large caps stocks like Zee, Tata Motors
viii) India’s economy registering lowest growth of 5.8% in the Q4 FY19 in last 5 years
ix) Contagion risk arising due to recent default of Rs 1,000 crore by DHFL
x) Ongoing NBFC sector crisis due to credit squeeze, over-leveraging, excessive concentration and massive mismatch between assets and liabilities.

Small Cap Index has not delivered negative returns for 2 consecutive years in past 16 years

We believe this is a blessing in disguise because for the first time in many years, several small companies having robust business fundamentals are available at attractive valuations. Do you know in last 16 years, small cap index have not given negative returns for 2 consecutive years. In 2018, BSE Small Cap Index has given negative returns of -23.4% and since beginning of this year, index is down by another -5.7%. Below is the table which indicates Small Cap Index returns YoY since 1st April 2003 (the data is available from April 2003 onwards only in BSE).
Whenever, Small Cap Index delivered significantly high negative returns in a particular year during last 16 years, it has delivered double digit positive returns the very next year. While Nifty and Sensex which have given positive returns and are hovering near their life time high made recently, Small & Mid Cap Index have underperformed by wide margin and is down by 31% and 21respectively from their peak made in Jan 2018. The divergence between Sensex / Nifty and Small & Mid Cap Index will not last for long going forward considering valuations gap emerging between large caps in comparison to mid & small cap stocks.

Tide to turn favourable sooner than later for small cap stocks

If you analyse the bear phase of stock markets cycle since 1990, you will find that such bear phase has lasted for maximum period of 15 to 18 months. Small cap index which made high in Jan 2018 with end of its bull run has corrected by -31% from its peak of 20,184 in last 17 months. Taking clues from history, we believe we are close to end of bear cycle in broader market after which stock prices of small and mid-caps will start recovering by going up and further up.

Below is the monthly chart of BSE Small Cap Index since 2005. The chart illustrate that the last decade bull run which started in 2003 made a peak in Jan 2008 and later went into bear phase with continuous fall in stock prices of small caps for next 15 months, i.e. from Jan 2008 to March 2009 and later stock prices of small caps recovered and went through correction and consolidation phase. Similarly, bull run in small caps which started in 2014 made its peak in Jan 2018 and moved into bear territory later. This month i.e. Jun’19 is the 17th month of bear phase experienced by broader markets – small & mid caps. If history of small cap index repeats itself (have very high probability), we are near to end of bear phase after which stock prices of small caps will start moving northward.

With fear of losing capital and dampened sentiments towards broader markets, small cap stocks are falling like nine pins these days. We have observed a lot of hopelessness towards broader market as Investors who started investing in equities during 2017 and 2018 are not willing to invest in this space due to pain of high negative returns in their portfolio and negative sentiments towards broader markets.

Series of negative developments have made Investors taking back seat in terms of investing in broader markets. Yes Bank and DHFL are dumped by Investors due to NPAs and liquidity concerns, followed by severe correction in Essel group stocks like Zee, Dish TV etc due to high debt concerns. Moreover, continuous collapse of ADAG group companies stock prices with lenders started selling collateral shares of these companies spoiled market sentiments. Recent episode of crash in stock prices of Jet Airways, Indiabulls Housing Finance and Jain Irrigation have completely shaken up retail investors. Collapse in stock prices of such well known and bigger companies on daily basis have butchered investors faith and interest towards investing in small and mid cap companies.

Usually bottom is made during these panic times which we are witnessing currently with series of negative news flow. In fact, we believe bottom is already in place for broader market with lows of Feb'19 post Pulwama attack. Once broader market start factoring all these negatives, the focus will shift towards individual company's earnings growth and current valuations which will drive stock prices up in coming quarters.

Greed which was seen in broader market (small & mid caps) in the year 2016 and 2017 has turned to fear these days. Are you also fearful? This is the time to do opposite of the herd, its time to be greedy when others are fearful. If you are not investing in equities during these opportune times and taking the back seat, you are making a bigger mistake. Are you not following the herd mentality? If you have invested in markets during 2016 and 2017 when valuations of companies were significantly higher compared to today’s valuation, why you have stopped investing now?

Remember, in the long run, you do not make decent returns on your investments by following the herd i.e. when everyone is buying stocks; instead you get handsome returns on our investments by investing in stocks at significantly low prices as no one else is buying, and by selling to them when they come back in herd due to greed in future.

If you are not a long-term investor and thinking to make quick bucks by timing the market, it could be risky. Hence, we advise to invest only keeping a longer time horizon, minimum 2 to years or more. In fact, to make enormous wealth from equities, you should have horizon of 10 to 20 years so that you can experience 2 to 3 market cycles and reap maximum reward during bull phase of equity markets. We do not believe in timing the market and hence advise our members to follow a discipline approach, but it’s wise to turn aggressive in terms of equity investing during panic times which we are experiencing now.

“The first rule of investment is ‘buy low and sell high’, but many people fear to buy low because of the fear of the stock dropping even lower. Then you may ask: ‘When is the time to buy low?’ The answer is: When there is maximum pessimism.”
Sir John Templeton

Its important to be a disciplined investor who keep on investing in systematic way irrespective of market conditions and not an emotional investor who usually buy stocks during bull phase when stock prices are moving higher because of greed and sell them in panic during bear phase due to severe fall in stock prices, making mistake of buying high and selling low.

Download Potential Multibagger Stock 2019 Report for Free!

Thursday, October 4, 2012

Last 2 Years Performance of Sensex, Mid & Small Cap Index

Starting Sept'12, FIIs are continuously pouring their money in India. Since last one month, Nifty and Sensex have risen by almost 8%. Thanks to continuous inflows from FIIs which are buying into Indian equities. Credit goes to FED announcement of QE3 which increased liquidity and inflows in global stock markets and also big annoucement on much awaited reforms from our Government. Its liquidity driven market, hence concerns related to fundamentals like high inflation, high interest rates, rising crude oil prices, high fiscal deficit along with weak IIP numbers still remains.
Due to these factors, retail participation is still low and DIIs are net sellers in Indian stock market on almost daily basis. Can you imagine, retail participation in India in terms of investments in stock market was at 4 years low in Aug-Sept 2012.

But good times are going to come sooner than later, in case of any corrections, DIIs will get into the market and buy on dips. Another positive is weakness in dollar and Rupee appreciation which hits 5 month high. This will ease some pressure of govt in terms of importing crude oil.

There are hundred of stocks which tested 52 week lows in the month of July and August and now are available at decent valuations.

Lets look at Past Performance of Small and Mid Cap Index - Last 2 Years

Small Cap Index during end of Sept 2010 was at around 10000 which made a high of 11367 on 11th Nov 2010 and today closed at 7186. Hence, Small Cap Index has given negative returns of -28% in last 2 years. If we look at Mid Cap Index, it was at around 8000 levels two years back and today closed at 6704, down by -16% in last 2 years. Similarly, Sensex is down by -6% in last 2 years.

What a disappointing performance of both indices including Sensex? A strong reason why your mutual funds are not performing. Isn't it? But are your fund managers smart enough to outperform major indices. We don't think so, more than 80% of equity mutual fund schemes have underperformed major indices which means that your mutual fund is giving you lesser returns compared to these indices.

Is this really bad? Are you worried? You should not!

Its a fact that nobody in this universe can time the stock market but its wise for medium & long term investors to invest during tough times. Using this approach, Investors can bet on stocks which are fundamentally strong and are trading below their intrinsic value, you can get them cheap due to poor economic conditions and negative sentiments in market. And once sentiments turn to positive, it rewards investors who entered during market lows giving great returns to them on their investments. A right approach towards equities - buy at low, sell at high. But more important is to invest in right stocks.

Hence, you must consider this as an opportunity to invest in fundamentally good stocks for medium to long term.

So in which stocks you can invest in?

You can invest in small, mid as well as large cap stocks of sectors which are heavily discounted. Small and Mid cap stocks are more volatile compared to large cap because of low liquidity. Hence, during bad times, they experience more pain in terms of falling prices. But good small and mid cap companies with sound fundamentals can give you multibagger returns in medium to long term.

Past performance of Saral Gyan - Hidden Gems

It gives us immense pleasure to share that Saral Gyan - Hidden Gems (unexplored multibagger micro/small cap stocks) outperformed all major indices during last two year giving excellent returns to Hidden Gems subscribers during bad times of stock market.

7 out of 21 Saral Gyan Hidden Gems stocks (Sept 2010 - May 2012) gave more than 100% returns to our investors. Average returns of Hidden Gems (as on date) is +36% (maximum average returns is 70%) compared to negative average returns of -5% of small cap index. Moreover, we suggested partial profit booking in those stocks which have given more than 100% returns in short span of time. Hence actual returns are more compared to average return as indicated in below table.

Below is the performance of Hidden Gems of last 2 years (upto Jun'12) recommended by our equity analyst team:

(Click on the image if not visible)

Below are the 4 Hidden Gems of 2011 which have given more than 100% returns.

You can download complete research report using below links:

1. Camlin Fine Sciences (BSE Code - 532834) : Camlin Fine Sciences was recommended by our equity analysts at price of 60 (price adjusted due to stock split) considering positive developments in the company. And after 8 months suggested partial profit booking by selling 50% holding of Camlin Fine Sciences at price range of Rs. 130 (price adjusted due to stock split), returns of 115% in short span of 8 months. Remaining 50% stock holding is free for Hidden Gem subscribers.

Camlin Fine Sciences Research Report - Read/Download

2. Cravatex (BSE Code - 509472) : Cravatex belongs to consumer segment and was attractively valued before bonus issue, company own rights to sell brands like Fila and Proline and was expanding its reach to customers in different geographies of the country, stock was recommended at price of Rs. 700 (bonus adjusted) in May 2011 by our equity analysts. Stock made high of Rs. 799 in April this year registering maximum returns of almost 130%. Partial profit booking was recommended above 100% returns.

Cravatex Research Report - Read/Download

3. WPIL (BSE Code - 505872) : Our equity analysts noticed that WPIL promoters are doing aggresive open market purchase. Later our analysts tried to dig out the reasons and found that WPIL has made few acquisition/ tie ups globally to synergize their business and is going to be benefitted tremendously in coming quarters, same was reflected later in company's quarterly results. Stock recommended at average price of Rs. 182.5 made high of Rs. 442 during this week. We suggested partial profit booking to our subscribers by selling 50% of stock holding at Rs. 425 (returns of 130%) and holding the remaining quantity for long term.

WPIL Research Report - Read/Download

4. Cera Sanitaryware (BSE Code - 532443) : Cera Sanitaryware was attractively priced and was trading below its intrinsic value in Dec 2011. Our analysts were confident enough about decent returns in this scrip and suggested a buy at price of Rs. 157, stock has made 52 week high of 381 recently and doubled the investments of our subscribers in short span of 8 months. As valuations are still attractive, we suggest our subscribers to hold the stock.

Cera Sanitaryware Research Report - Read/Download

Shri Adhikari Brother - Sept'10, De Nora Ltd - Nov'10 and Indag Rubber - Jan'12 also gave 100% plus returns, partial profit booking in these stocks already suggested to our members.


Equity analysts team at Saral Gyan gives 100% to identify the best investment candidates, objective is not only to protect your capital but also to grow it at healthy rate.

We do not just recommend the stocks but also share the authentic and unbiased research reports which help you to understand the company's business along with growth opportunities and guide you to make an educated investment decision.

Grab Best 3 Small Cap Stocks

Now, you have an opportunity to grab best 3 small cap stocks by subscribing to Hidden Gems annual subscription. Yes, you read it right! We will share 3 Hidden Gems research reports published in past by our equity analysts team in which you can make fresh investments for long term.

These 3 Hidden Gems are the small cap companies which belong to different sectors and can do extremely well on bourses in next 4-6 quarters. These companies have registered impressive  topline and bottom line growth in FY2011-12 and Q1 of this financial year, have limited downside risk and can be added in your portfolio.

Subscribe to Hidden Gems and Grab Best 3 Small Cap Stocks to power your equity portfolio. You need not to pay any additional cost other than annual subscription charge (Rs. 7500 / $ 150) for grabbing best 3 Hidden Gem stocks to add in your portfolio.

Under annual subscription, you with receive total 12 Hidden Gems monthly research reports along with 3 stocks research reports of past for fresh investment. We will also share Hidden Gems - Flash Back report (update of 21 previously recommended Hidden Gems).

Now you can pay online using your credit card, online fund transfer using NEFT of by depositing cheque. Click here to view the payment options available.

Do write to us in case of any queries.

Wish you happy & safe investing!


Team - Saral Gyan.
Saral Gyan Capital Services

Wednesday, September 5, 2012

Last 2 Year Performance of Sensex, Mid & Small Cap Index

High Inflation, high interest rates, rising crude oil prices, weak IIP numbers, GDP growth slipping below 6%, slowdown in trade and exports, europe crisis - All these factors are hurting sentiments of investors and keeping them away from investing in equities. Can you imagine, retail participation in India in terms of investments in stock market is at 4 years low.

There are hundred of stocks which not only tested 52 week low but now are available at 3-5 years low. After such a severe correction in prices of small and mid cap stocks, is there more pain left for investors?

Lets look at Past Performance of Small and Mid Cap Index - Last 2 Years

Small Cap Index on 6th Sept 2010 was at 10095 which made a high of 11367 on 11th Nov 2010 and today closed at 6391. Hence, Small Cap Index has given negative returns of -37% in last 2 years. If we look at Mid Cap Index, it was at 7962 two years back and today closed at 6024, returns of -24% in last 2 years. Similarly, Sensex also gave negative returns of -14% in last 2 years.

What a disappointing performance of both indices including Sensex? A strong reason why your mutual funds are not performing. Isn't it? But are your fund managers smart enough to outperform major indices. We don't think so, more than 80% of equity mutual fund schemes have underperformed major indices which means that your mutual fund is giving you lesser returns compared to these indices.

Is this really bad? Are you worried? You should not!

Its a fact that nobody in this universe can time the stock market but its wise for medium & long term investors to invest during tough times. Using this approach, Investors can bet on stocks which are fundamentally strong and are trading below their intrinsic value, you can get them cheap due to poor economic conditions and negative sentiments in market. And once sentiments turn to positive, it rewards investors who entered during market lows giving great returns to them on their investments. A right approach towards equities - buy at low, sell at high. But more important is to invest in right stocks.

Hence, you must consider this as an opportunity to invest in fundamentally good stocks for medium to long term.

So in which stocks you can invest in?

You can invest in small, mid as well as large cap stocks of sectors which are heavily discounted. Small and Mid cap stocks are more volatile compared to large cap because of low liquidity. Hence, during bad times, they experience more pain in terms of falling prices. But good small and mid cap companies with sound fundamentals can give you multibagger returns in medium to long term.

Now lets review performance of Saral Gyan - Hidden Gems

It gives us immense pleasure to share that Saral Gyan - Hidden Gems (unexplored multibagger micro/small cap stocks) outperformed all major indices during last two year giving excellent returns to Hidden Gems subscribers during bad times of stock market.

6 out of 21 Saral Gyan Hidden Gems stocks (Sept 2010 - May 2012) gave more than 100% returns to our investors. Average returns of Hidden Gems (as on date) is +26.5% (maximum average returns is 64%) compared to negative average returns of -15.3% of small cap index. Moreover, we suggested partial profit booking in those stocks which have given more than 100% returns in short span of time. Hence actual returns are more compared to average return as indicated in below table.

Below is the performance of Hidden Gems of last 2 years (upto Jun'12) recommended by our equity analyst team:

(Click on the image if not visible)

Below are the 4 Hidden Gems of 2011 which have given more than 100% returns.

You can download complete research report using below links:

1. Camlin Fine Sciences (BSE Code - 532834) : Camlin Fine Sciences was recommended by our equity analysts at price of 60 (price adjusted due to stock split) considering positive developments in the company. And after 8 months suggested partial profit booking by selling 50% holding of Camlin Fine Sciences at price range of Rs. 130 (price adjusted due to stock split), returns of 115% in short span of 8 months. Remaining 50% stock holding is free for Hidden Gem subscribers.

Camlin Fine Sciences Research Report - Read/Download

2. Cravatex (BSE Code - 509472) : Cravatex belongs to consumer segment and was attractively valued before bonus issue, company own rights to sell brands like Fila and Proline and was expanding its reach to customers in different geographies of the country, stock was recommended at price of Rs. 700 (bonus adjusted) in May 2011 by our equity analysts. Stock made high of Rs. 799 in April this year registering maximum returns of almost 130%. Partial profit booking was recommended above 100% returns.

Cravatex Research Report - Read/Download

3. WPIL (BSE Code - 505872) : Our equity analysts noticed that WPIL promoters are doing aggresive open market purchase. Later our analysts tried to dig out the reasons and found that WPIL has made few acquisition/ tie ups globally to synergize their business and is going to be benefitted tremendously in coming quarters, same was reflected later in company's quarterly results. Stock recommended at average price of Rs. 182.5 made high of Rs. 442 during this week. We suggested partial profit booking to our subscribers by selling 50% of stock holding at Rs. 425 (returns of 130%) and holding the remaining quantity for long term.

WPIL Research Report - Read/Download

4. Cera Sanitaryware (BSE Code - 532443) : Cera Sanitaryware was attractively priced and was trading below its intrinsic value in Dec 2011. Our analysts were confident enough about decent returns in this scrip and suggested a buy at price of Rs. 157, stock has made 52 week high of 381 recently and doubled the investments of our subscribers in short span of 8 months. As valuations are still attractive, we suggest our subscribers to hold the stock.

Cera Sanitaryware Research Report - Read/Download

Equity analysts team at Saral Gyan gives 100% to identify the best investment candidates, objective is not only to protect your capital but also to grow it at healthy rate.

We do not just recommend the stocks but share authentic and unbiased research reports which help you to understand the company's business along with growth opportunities and guide you to make an educated investment decision.

Grab Best 3 Small Cap Stocks

Now, you have an opportunity to grab best 3 small cap stocks by subscribing to Hidden Gems annual subscription. Yes, you read it right! We will share 3 Hidden Gems research reports published in past by our equity analysts team in which you can make fresh investments.

These 3 Hidden Gems are the small cap companies which belong to different sectors and can do extremely well on bourses in next 4-6 quarters. These companies have registered impressive  topline and bottom line growth in FY2011-12 and Q1 of this financial year, have limited downside risk and can be added in your portfolio.

So what are you waiting for? Subscribe to Hidden Gems and Grab Best 3 Small Cap Stocks to power your equity portfolio. Good News! You need not to pay any additional cost other than annual subscription charge (Rs. 7500 / $ 150) for grabbing best 3 Hidden Gem stocks. Under annual subscription, you with receive total 12 Hidden Gems monthly research reports along with 3 stocks research reports of past for fresh investment. Hurry! Subscribe today.

Now you can pay online using your credit card, online fund transfer using NEFT of by depositing cheque. Click here to view the payment options available.

Do write to us in case of any queries.

Wish you happy & safe investing!


-Saral Gyan Team.

Sunday, July 29, 2012

Small & Mid Caps Collapse upto 40%. What went Wrong?

Well known mid cap companies collapsed by 40% in just 2 days, What went wrong?
There are several mid cap companies which touched their year’s new lows on stock exchanges on Friday. The benchmark indices, however, fared well during the day. Sensex was up by 200 points and Nifty climbed 57 points at Friday’s close. Despite a rise of over 1% in both indices, several mid-cap scrips crashed to their 52-week lows.

Whatever be the reason (or rumour), Adani Group shares have been digging the bottom of late. Friday was no exception with the stock price of Adani Enterprises touching a six-year low of 171 per share, while Adani Power hit a record low of 40.75 per share. The Adani Enterprises scrip crashed 77.47% from its 52-week high of 759 per share while the latter was down by 64% from its respective high of 113.25.

Similarly, stock prices of Torrent Power, which recently posted a 70% fall in net profit in its first quarter results, have been at a 52-week low for the past two days. On Friday, the power company touched a three-year low price of 152.50 per share.

With the share prices of these companies at the yearly bottom, are they a good buy? Our experts suggest they are not worth the risk. This is happening due to margin calls, only small and mid-cap companies are facing this problem.

All the Sensex and Nifty-listed companies are being traded much higher than their 52-week lows. As these companies were strong, they never pledged their shares for liquidity. On the other hand, small companies, for expansions or for liquidity, pledged shares (loan against shares) and just then, the share prices of the companies started falling. The financial institutions, that took the shares of these companies against liquidity, had to sell the shares off at short prices. Hence, selling pressure increased and the share prices continued to fall.

This free fall is likely to continue, and investors should wait and watch for next couple of week, we believe only new reforms or measures from the government can help these scrips rise. Else, there is still a 10% room for them to fall further.

Is this matter of worry? Not at all, only thing which you need to take care of is to invest in fundamentally strong small and mid cap stocks. Infact, such corrections due to bad sentiments in market gives good opportunity to smart investors to invest in good companies with strong fundamentals at discounted price.

You can invest in Saral Gyan Hidden Gems and Value Picks for long term. Our analysts will never suggest you to take exposure in any of the stock which is sitting in huge pile of debt or pledged its shares to institutions for working capital requirement.


Subscribe to Hidden Gems and add power of small caps stock in your equity portfolio. Save upto 50% on subscription cost, Hidden Gems subscription charge will be revised to Rs. 7500 effective 1st Aug 2012. Subscribe @ Rs. 5000 and make direct saving of Rs. 2500. Hurry! Last 5 Days.

To read more on Hidden Gems payment options and facilities, Click Here!

Tuesday, August 31, 2010

Performance of BSE Sensex & BSE Mid Cap Index

The BSE-Sensex has been trading in the range of 16,000 to 18,000 for almost a year now. It is only in the past few trading session that it has managed to stay above the 18,000 mark. However, purely going by valuations, the general consensus is that the markets seem overvalued. And it has remained in the ‘slight expensive' zone over the past year as well. Hence, the rangebound movement in the index.

But what does this indicate for the midcap stocks, whose representative index (the BSE-Midcap Index) is benchmarked against the BSE-Sensex?

Below we have displayed a comparative data for both the indices - BSE-Sensex and BSE-Midcap index.

Data Source: CMIE Prowess

If one had invested Rs 100 at the beginning of 2008 in the BSE-Sensex and the BSE-Midcap indices each, it would have been worth Rs 90 and 79 respectively. This indicates that the Sensex has outperformed the BSE-Midcap Index over this two and a half year period. However, the BSE-Midcap Index has by far outperformed the BSE-Sensex over the last year as well as during the year till date (YTD; January 1 2010 to August 24 2010). While the BSE-Sensex has risen by 17% over the last year, the BSE-Midcap Index has risen by 37%. As for the YTD comparison, the BSE-Sensex is up by 5%, while the BSE-Midcap Index is up by 17%.

However, the best way to gauge the attractiveness of midcap stocks is to look at their price to earnings ratio (PE). A batter way to gauge the same is by comparing the valuations of the BSE-Midcap Index with the benchmark index, the BSE-Sensex.

Below is a chart indicating the PE ratios of both the indices since 2008. We have also shown the average PE ratios of both these indices during this two and a half year period (prior period data was not available at this time).
Data Source: CMIE Prowess

Well, considering that the BSE-Sensex is trading at a price to earnings of about 21.8 times, it seems to be a tad on the expensive side (as compared to its long term average valuation of about 16 to 17 times). With this, the BSE-Midcap Index's valuations seem to be quite reasonable.

There is no doubt that the BSE-Midcap Index would trade at lower valuations as compared to the BSE-Sensex, the main question is that despite this, are midcaps attractive at this point in time?

Mid cap stocks if carefully selected from promising sectors with reasonable valuations can broadly out perform large cap stocks in medium to long term. Mid caps always play a key role in capital appreciation for investors with aggresive equity portfolios. In aggressive equity portfolio's, equity allocation for mid cap stocks can be as high as 60 to 70 percent.

Saral Gyan offers Value Picks - Research report of mid cap stocks with plenty of upside potential.