The category has seen significant growth in the recent past and the price tags of stocks have also reflected the same.
“We have been in a territory where valuations look expensive,” said Varun Fatehpuria, founder of Daulat Wealth Management. This has been the case in the last 12-14 months, he said.
Both the price and the movement is supported by strong earnings growth in the category, according to him. Despite this, investors need to understand the seasonality in the category and venture into the space if their portfolio has the risk tolerance for the same.
For those investors looking to venture into the space, lumpsum is not the only route of investing.
“As a general practice, we advise clients to invest in small caps through the SIP route since it averages out their investment cost over some time,” said Fatehpuria.
