Five Midcap Stocks You Can Consider with a 12-month Horizon
timesinternet.in ETMarkets.com: The BSE Midcap index has managed quite a turnaround from where things stood on February 29. By that day, the BSE Midcap index had lost 14% of its value for the year compared with a 12% crack in the BSE benchmark Sensex.
Fast forward one month, not only has it managed to rally more than the benchmark (10% compared with a 7% rise in the Sensex), but it has gone from underperforming the 30-pack benchmark to outperforming it.
“We may have hit a bottom somewhere closer to the 6,800 level on the Nifty50. Once that is in place, these indices — Midcap and Smallcap — tend to usually outperform the market and that is precisely what is happening,” said Piyush Garg, EVP & CIO, ICICI Securities.
Here are five midcap ideas from experts for you to look at with a 12-month investment horizon:
Sandeep Raina, deputy VP, Edelweiss Securities
“We believe the stock will do well because the commercial vehicle markets are doing well. Second, the company is very much focussing on the after sales because that is the place where Jamna was not there and the company right now is also focusing on financials, they want to have a 30% Return on Capital, they want to focus on dividends, they have a focus on growth rates too,” he said.
“In last five years, it has grown at close to 30%. I look at the valuation, it is close to 12 times its FY17 earnings. This can be a multibagger in next two-three years,” Raina said.
Sandeep Raina’s third pick is Indo Count. “The return on capital (ROC) is close to 30-32% which is very high for a normal textile company. The growth is there, market is there, financials are very strong,” he said. “I think the company can be a multibagger in next two-three years from here on after giving so much fancy returns to the investors.”
Sandip Sabharwal, asksandipsabharwal.com
“The company has donw well, in the last 10 days of March, they also paid out a dividend of ₹ 1.60. Even on dividend yield, it is still at 2%, order booking should be pretty healthy,” said Sandip Sabharwal, asksandipsabharwal. com. “I think Praj is going to do extremely well. I think in the next twothree years, the growth and improvement in profitability both are going to be quite significant and to that extent, it remains one of my top holdings.”
“One of the largest players in the Central region, it has witnessed significant improvement in operations over the past couple of years with the completion of its expansion-cum-modernisation program,” said Prabhudas Lilladher. “This, coupled with a strong outlook on region’s demand, absence of any fresh capacity addition and exit of weak players like JP Associates, drives our positive outlook on the stock.”