Small and Midcap Correction Over: Porinju Veliyath Names Thomas Cook as New Bet

In a move that signals returning confidence in India’s broader markets, veteran fund manager Porinju Veliyath has suggested that the correction phase for small and midcap stocks is largely over. After a period of volatility that saw many retail favorites lose steam, Veliyath believes the market is now entering a phase where "cherry-picking" quality businesses at reasonable prices will yield significant rewards for patient investors.

Thomas Cook India: The New Portfolio Entrant

The founder of Equity Intelligence revealed that his fund has recently added Thomas Cook India to its holdings. This move suggests a bullish outlook on the domestic travel and tourism sector, which has seen a robust post-pandemic recovery. By picking up a stake in this well-known brand, Veliyath is signaling that established names with strong service networks are currently available at attractive valuations.

Top Sectors for the Next Decade

While the market focus often shifts toward short-term gains, Veliyath has identified two specific sectors that he believes will define the next ten years of wealth creation in India:

• AI-Leveraged Midcap IT: Rather than just looking at the giants, he points toward mid-sized IT firms that are successfully integrating Artificial Intelligence to improve their service offerings and margins.
• Pharmaceuticals: The veteran investor remains bullish on the healthcare and pharma space, seeing it as a compelling theme for long-term growth as companies move up the value chain.

A Shift Toward Quality and Patience

The core message for retail investors is a shift in strategy. The era of "everything rising together" in the small-cap space has likely ended, replaced by a market that requires selective stock picking. Veliyath emphasizes that while the bottom has likely been formed, only businesses with solid fundamentals and quality management will lead the next leg of the rally.

For the average investor, this serves as a reminder that market corrections are often the best times to accumulate shares in companies that were previously considered too expensive. By focusing on "quality at the right price," investors can position themselves for the next cycle of growth in the Indian equity markets.

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