Small and mid-cap stocks have been the driver of the post-Covid recovery in the markets. Some froth may recede in the coming quarters, but the medium-term outlook remains robust. Earnings growth has been democratised in India with broader participation across companies, which is reflecting in SMIDs enjoying their time in the sun. Fragmented industrial sectors, with no clear leaders, reinforce the momentum, Emkay Global Financial Services said in a note. A multi-year growth trend that is yet to fully play out. This includes capital goods, auto ancillaries, chemicals, metals, and pharmaceuticals. The focus of this theme will be SMIDs, as there are few large caps available. Premiumization: B2C companies will generally remain laggards, but we see a pocket of opportunity in premiumization. As India’s per-capita income breaks new levels, premium segment growth should get an impetus and companies catering to this segment should outperform.