Mid-cap stocks have become investors’ favorites in the last few years because of their large returns. They often present the sweet spot between small-cap companies’ rapid growth potential and large-cap companies’ stability.
Over the past five years, the Nifty Midcap 150 index has outperformed the Nifty 50, delivering an annualized return of 25.68% compared to Nifty 50’s 14.53%. This means an initial investment of ₹1 lakh in the Nifty 50 would have grown to approximately ₹1.97 lakh. In contrast, the same amount invested in the Nifty Midcap 150 would have increased to about ₹3.13 lakh, marking a significant gain difference exceeding ₹1 lakh.
During the same period, many stocks have become high-growth, moving from mid-cap to large-cap categories. Some examples are IRCTC, Tata Elxsi, LTI Mindtree, Polycab, and many more.
This article will discuss India’s top 10 midcap stocks in 2024. Let’s start.
What are Mid cap Stocks?
According to the classification issued by SEBI on 6th October 2017 on the market capitalization of stocks, the top 100 listed companies are large-cap stocks, from 101 to 250 are mid-cap stocks, and companies ranking from the 250th position are small-cap stocks.
However, investors generally consider any company with a market cap of ₹5,000 to ₹20,000 crores as a mid-cap company. Nifty Midcap 50, Nifty Midcap 100, Nifty Midcap 150, Nifty Midcap Select, and BSE Midcap index are some of the popular midcap indexes in India that investors widely track.
Let’s now look at the top 10 midcap stocks in India for 2024. The stocks in the list have a market cap between ₹5,000 to ₹20,000 crores, a Return on Equity of more than 15%, and recorded CAGR revenue and PAT growth of more than 15% in the last three years.
Top 10 Mid Cap Stocks in India 2024
- Natco Pharma
- Triveni Turbine
- GRSE
- Sonata Software
- Newgen Software
- Fine Organics India
- Gabriel India
- Voltamps Trans
- Action Construction
- Raymonds
Natco Pharma
Natco Pharma is a Hyderabad-based multinational pharmaceutical company specializing in finished dosage formulations, active pharmaceutical ingredients, and crop health science products. It is also a contract manufacturer for several drugs in India and the US.
The company is a major producer of branded oncology medicines and hepatitis C drugs. In the last five years, its revenue nearly doubled from ₹1,915 crores to ₹3,998 crores. Although the stock has underperformed in the last three years, its share price has increased by 64% in the last year.
| Market Capitalisation (in cr) | ₹17,916 |
| 3-year Compounded Sales Growth | -1.30% |
| 3 year Compounded Sales Growth | 25% |
| Return on Equity | 26% |
Triveni Turbine
Triveni Turbine is a leading industrial steam turbine manufacturer that produces up to 100 MW. It is headquartered in Bangalore and has a dominant market share of 60% in India. The company has manufactured over 6,000 steam turbines and has a global footprint spanning over 75 countries.
The company has recorded robust revenue and profitability growth in the last three years, registering a CAGR growth of 33% and 35%, respectively. The stock has witnessed a price growth of 50% in the last year.
| 3-year Stock Price CAGR | ₹18,543 |
| 3-year Compounded Sales Growth | 72.8% |
| 3 year Compounded Sales Growth | 33% |
| Return on Equity | 31.3% |
Garden Reach Shipbuilders & Engineers Limited
Garden Reach Shipbuilders & Engineers Limited is one of India’s premier shipbuilders, with a history dating back to 1884. It started as a small workshop for repairing vessels. The government of India took over the company in 1960, and it had the distinction of becoming the first shipyard to build warships for the Indian Navy.
Over the last six decades, the company has built over 785 platforms, including more than 100 platforms for the Indian Navy and Coast Guard. GRSE has an order book worth approximately ₹25,000 crores from the Indian Navy and Indian Coast Guard.
In the last three years, the company’s compounded sales growth and profitability have recorded CAGR growth of 47% and 31%, respectively. The stock price has surged by almost 200% in the last year.
| Market Capitalisation (in cr) | ₹16,237 |
| 3 year Stock Price CAGR | 97.2% |
| 3-year Stock Price CAGR | 46.6% |
| Return on Equity | 23.1% |
Sonata Software
Sonata Software is a leading global IT company that provides digital transformation solutions and services. The company enables accelerated digital transformation through a unique approach called Platformation.
It provides services in various domains, including business intelligence and analytics, application development management, mobility, cloud, social media, testing, enterprise services, and infrastructure management services. Sonata Software has over 6500 engineers on its payroll across the US, UK, EU, APAC, and ANZ.
| Market Capitalisation (in cr) | ₹14,194 |
| 3-year Compounded Sales Growth | 22.5% |
| 3 year Compounded Sales Growth | 26.8% |
| Return on Equity | 30.3% |
Newgen Software
Newgen Software is a leading global provider of Business Process Management (BPM), Enterprise Content Management (ECM), and Customer Communication Management (CCM) solutions.
The company is popular for its industry-recognized low-code application platform, which develops and deploys complex, content-driven, and customer-engaging business applications on the cloud. In the last five years, the company’s profitability has grown by a CAGR of 20%, while its stock price has grown by 42%.
| 3-year Stock Price CAGR | ₹12,640 |
| 3-year Compounded Sales Growth | 62.4% |
| 3 year Compounded Sales Growth | 23% |
| Return on Equity | 23% |
Fine Organics India
Fine Organics is a leading producer of specialty additives used in various industries, including food, plastics, rubbers, cosmetics, coatings, and several others. The company is a preferred supplier of oleochemicals derived from natural additives used in cosmetics, lubricants, and other chemical products.
The company has a global presence, with customers in over 80 countries. Over the last three years, Fine Organics has grown its compounded sales growth and earnings at a CAGR of 20% and 47%, respectively.
| 3-year Stock Price CAGR | ₹13,521 |
| 3-year Compounded Sales Growth | 13.6% |
| 3 year Compounded Sales Growth | 20.3% |
| Return on Equity | 21.8% |
Gabriel India
Gabriel India is a Delhi-based auto ancillary company that manufactures suspension components and ride control products. It is one of the top 10 suspension manufacturers globally with a sizable presence across diverse business segments, including 2-3 wheelers, passenger cars, commercial vehicles, railways, and aftermarkets.
The company has debt-free operations, and in the last three years, it has grown its compounded sales growth and profit at a CAGR of 25% and 46%, respectively. In the last one, Gabriel India’s stock price has risen by almost 100%, from ₹179 on 2nd June 2023 to ₹357 on 31st May 2024.
| 3-year Stock Price CAGR | ₹5,142 |
| 3-year Compounded Sales Growth | 40.6% |
| 3 year Compounded Sales Growth | 25.4% |
| Return on Equity | 19.7% |
Voltamp Transformers Limited
As the company’s name suggests, Voltamp Transformers is a leading supplier of electrical transformers and switch gears. The company has technical collaborations with MORA, Germany, and HTT, Germany, to manufacture world-class oil-filled power and distribution transformers.
Voltamp has all of India’s leading governmental and private power generation and distribution companies and exports its products to foreign countries. While the company’s sales have grown at a CAGR of 33% in the last three years, profit has increased by a CAGR of 50% during the same period.
| Market Capitalisation (in cr) | ₹11,851 |
| 3-year Compounded Sales Growth | 114% |
| 3 year Compounded Sales Growth | 32.7% |
| Return on Equity | 25% |
Action Construction Equipment Limited
Action Construction Equipment Limited (ACE) is India’s leading supplier of construction and material handling equipment. Its products include crawlers, cranes, concrete placing booms, bulldozers, mobile tower cranes, tractors, carry cranes, and more.
The company can produce 12,000 construction equipment and 9,000 tractors annually through its eight manufacturing sites. Owing to the government’s higher spending on infrastructure in the last few years, the company’s sales have increased by a CAGR of 33% and profit by a CAGR of 63% in the last three years.
| 3-year Stock Price CAGR | ₹17,349 |
| 3-year Compounded Sales Growth | 106% |
| 3 year Compounded Sales Growth | 33.4% |
| Return on Equity | 30.6% |
Raymonds
Raymonds, the brand needs no introduction. It was incorporated in 1925 and is a part of the JK Group of companies. Its product portfolio includes brands like Raymond, Park Avenue, ColorPlus, Parx, and Ethinx, catering to different segments of the market, from luxury to mass-market,
In the last three years, the company’s sales have increased by a CAGR of 38%, while profits have grown at a CAGR of 100%.
| 3-year Stock Price CAGR | ₹ 14,918 |
| 3-year Compounded Sales Growth | 78.7% |
| 3 year Compounded Sales Growth | 37.8% |
| Return on Equity | 44.6% |
Why Invest in Mid-cap Stocks?
Investing in mid-cap stocks offers several advantages to investors, such as:
- Growth Potential: Midcap companies are usually in the growth phase of their business cycle. Their current focus is on rapidly expanding their market share, challenging the established players by offering a unique value composition. This growth potential often leads to significant capital appreciation for investors.
- Less Volatility Compared to Small-Cap Stocks: Midcap stocks are generally more volatile than large cap stocks but less volatile than small-cap stocks. They make a great investment option for investors who are moderate risk-takers but seek higher returns.
- Potential To Become Large Cap Stocks: Midcap stocks can become large cap stocks and secure a dominant market position. The transition from midcap to large cap stocks can result in huge capital appreciation.
- Innovation and Agility: Midcap companies frequently combine the agility of smaller organizations with the resources of larger firms. This enables them to innovate and adapt fast to market changes, capitalizing on new opportunities and trends more effectively than larger, less adaptable businesses.
- Attractive Valuations: Compared to large cap stocks, midcap stocks are generally undervalued and available at a huge bargain to investors, given their huge growth potential. Due to less coverage by analysts and exposure of FIIs, investors often miss them, leading to attractive entry points for investors.
Conclusion
Investing in midcap stocks can be rewarding, but it also comes with its own set of challenges and risks. Before investing in top midcap stocks in India in 2024, analyze the company fundamentals and evaluate its industry position, management team, expansion plans, innovation, and R&D.
Ensure any investment in midcap stocks is part of your diversified portfolio that includes large-cap stocks as well. If you are confused about investing in midcap stocks, consult financial advisors.
*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
FAQs
What are the best midcap stocks in India?
The stocks in the Nifty Midcap and BSE Midcap indexes are generally considered the best midcap stocks. However, you can look for the best midcap stocks beyond the index by filtering out the stocks based on earnings growth and efficiency metrics.
Is it a good time to invest in midcap stocks?
Determining whether it is a good time to invest in mid-cap stocks depends on various factors, such as market conditions, the economic outlook, and individual financial goals. Mid-cap stocks tend to perform better when the country's GDP expands.
Are midcap stocks profitable?
Midcap companies offer higher growth potential than their large-cap counterparts because they are usually in their growth phase of business cycles and rapidly expanding their market share.
I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.