Prashant Jain, Founder & CIO of 3P Investment Managers, is more comfortable with largecaps. He believes small and midcaps have run ahead of fundamentals over the past couple of years, and even after the correction, valuations are not compelling at a category level.
At a time when markets are swinging between optimism and uncertainty, Prashant Jain, Founder and CIO of 3P Investment Managers, remains positive on India’s long-term story.
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Jain, who manages assets worth over $2 billion, believes the current phase offers a meaningful opportunity for investors willing to stay patient.
Jain argues that India is far better placed today than in previous cycles. Macro fundamentals—from a lower current account deficit to healthier balance sheets across banks and corporates—are providing stability even as global headwinds persist. He notes that despite foreign investors pulling money out, domestic flows have continued to hold up well, cushioning the market.
“India is far better positioned this time around… the ability of markets to absorb this FII selling is quite good, and over time, investments made around this time should yield above average returns,” he said.
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Jain points out that earnings growth expectations had become too optimistic post-COVID, especially as margins normalised. Going forward, he expects earnings growth to align more closely with nominal GDP growth.
Importantly, he does not see any deterioration in India’s structural growth story. With GDP growth holding around 7% and macro indicators improving, the broader outlook remains positive.
On market segments, Jain is clearly more comfortable with largecaps. He believes small and midcaps have run ahead of fundamentals over the past couple of years, and even after the correction, valuations are not compelling at a category level.
“It is in my opinion, an incorrect notion to say that, as a category, small and midcaps grow faster in businesses than the largecaps. I don’t think data suggests that….. as a category I would feel that largecaps should outperform,” he said.
That said, he acknowledges that sharp corrections have created pockets of opportunity. Investors can still find winners in the broader market, but it will require careful stock selection rather than a broad-based approach.
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First Published: Apr 16, 2026 12:13 PM IST
