Nifty Growth and Valuations - July End

## Growth Metrics: 

1. **Sales Growth (Q1 FY25)**:

   - **LargeCap**: 10.20%

   - **Midcap**: 7.70%

   - **Smallcap**: 10.50%

   - **Nifty 500**: 10.20%

   - **Observation**: Ideal growth should be around 15%. Smallcap and LargeCap segments exhibit more sales growth at 10.50% and 10.20%, respectively, while Midcap lags behind with a 7.70% growth rate. However none of the index shows significant growth as all are below 15%. 

2. **Profit Growth (Q1 FY25)**:

   - **LargeCap**: 0.20%

   - **Midcap**: -1.90%

   - **Smallcap**: 7.30%

   - **Nifty 500**: 0.20%

   - **Observation**: Ideal Profit growth is 15%. The Smallcap segment shows more profit growth at 7.30%, whereas Midcap faces a decline of -1.90%. LargeCap and Nifty 500 have minimal growth of 0.20%. This suggests that the profit growth is dim during Q1_fy25 hence, there may be negligible growth in Dividends as well as valuations. 

3. **Profit Margin (%)**:

   - **LargeCap**: -1.00%

   - **Midcap**: -0.80%

   - **Smallcap**: -0.20%

   - **Nifty 500**: -1.00%

   - **Observation**: All segments exhibit negative profit margins, with LargeCap and Nifty 500 experiencing the highest decline at -1.00%. Smallcap has the least negative margin at -0.20%. This suggest that cost has increased in Q1_fy25 dragging the profits down. 

### Valuation Metrics

1. **Trailing Price-to-Earnings (PE) Ratio**:

   - **LargeCap**: 23.5

   - **Midcap**: 42.9

   - **Smallcap**: 32.9

   - **Nifty 500**: 25.7

   - **Observation**: PE should be similar or near to growth that with somewhat premium, FairPe could be assumed 21. Midcap has the highest PE ratio at 42.9, indicating higher market valuation expectations compared to LargeCap and Smallcap, which are at 23.5 and 32.9, respectively. Largecap may see least volatility compared to Midcap. 

2. **Price-to-Book Value (PBV) Ratio**:

   - **LargeCap**: 4.06

   - **Midcap**: 4.93

   - **Smallcap**: 3.77

   - **Nifty 500**: 4.14

   - **Observation**: Midcap has the highest PBV ratio at 4.93, while Smallcap has the lowest at 3.77.

3. **Dividend Yield (%)**:

   - **LargeCap**: 1.1%

   - **Midcap**: 0.7%

   - **Smallcap**: 0.7%

   - **Nifty 500**: 1.0%

   - **Observation**: LargeCap offers the highest dividend yield at 1.1%, while both Midcap and Smallcap offer lower yields at 0.7%.

### Summary

- **Growth**: Smallcap segment leads in both sales and profit growth, while Midcap struggles with declining profits. Yet, none of the indices have favourable growth. 

- **Valuations**: Midcap is valued higher in terms of PE and PBV ratios, indicating strong market expectations, but it offers the lowest dividend yield. LargeCap, while offering better dividend yields, shows lower valuation ratios and minimal profit growth. Yet, all indices are at high valuations. 

We suggest that Growth is average while valuations are high. Investors should have cash with them to benefit from any fall in the market.