'Valuations of midcaps and smallcaps have reached very high levels, and hence to that extent leave little margin of safety.'
Within three trading sessions in May, foreign portfolio investors (FPIs) have pumped in Rs 9,461 crore into Indian equities. This follows net inflows worth Rs 7,936 crore in March, and Rs 11,631 crore in April. The trend, analysts said, could continue going ahead as the US Federal Reserve may soon halt its interest rate hike cycle, which will strengthen foreign fund inflows into emerging markets, including India.
'Valuations are very attractive, and most companies are cash-rich with strong dividend yields.'
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