Five Midcap Stocks You Can Con­sider with a 12-month Hori­zon

The Economic Times - - Smart - Chi­ran­jivi.C@

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.”

Prab­hu­das Lil­lad­her

“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.”

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