Exclusive conversation with Ramesh Mantri, CIO, WhiteOak Mutual Fund

Ramesh Mantri is currently the Chief Investment Officer at WhiteOak Mutual Fund. He boasts over 19 years of experience in investing and financial analysis, including stints at Alden Global Capital and CRISIL. Recently, Chirag Madia and Ruchira Sharma from our team sat down with Mantri to discuss how he picks small-cap stocks, the sectors that could prove profitable in the long term and how small-cap investors can make informed investment decisions. The performance of mid-and small-cap stocks has been phenomenal lately. In your view, is this momentum sustainable? In the last 12 months, we have seen mid-cap and small-cap stocks do better, and micro caps have done even better. As we speak today, when we go down the market capitalisation curve, the risk has gone up. To give an example, SMEs are riskier than micro caps; micro caps are riskier than small caps, and small caps are riskier than mid caps. Even if we adjust for recent mid-caps and small-caps corrections, I don't think you can find broad-based opportunities in small caps and mid caps today. I think it's still a cautious environment and valuations have to drop by at least 10-15 per cent for our investable universe to expand. By correction, I don't mean just price correction but time correction. And for stocks to become attractive in this space, you're a long way off. Finding value in the mid- and small-cap space can be quite a task. Are there specific sectors or industries where you see potential value today? If we look at the longer period, the opportunity is across the board. But clearly, some segments of the markets have heated up in themes