Top 5 Midcap Stocks to Buy in 2024

Top 5 Midcap Stocks to Buy in 2024

Life is all about balance & so is your portfolio. The ‘ishq hai toh risk hai ’ dialogue does not hold in real life. The reality is you have to balance the risk of your portfolio to get higher returns. And, what better than midcap stocks to bring this balance to your portfolio! 

 

What are Midcap Stocks? 

 Midcap Stocks have higher growth potential than large-cap stocks and lower risk than small-cap stocks. This provides a perfect blend of risk and return. 

 

 

Advantages of Investing in Midcap Stocks

• Midcap Stocks have high growth potential as compared to large-cap stocks. 

• It provides much-needed diversification to the portfolio. 

• Midcap stocks are a good way to make industry-specific investments. 

 

Disadvantages of Investing in Midcap Stocks

• Midcap stocks of certain industries that are affected by geopolitics could be more volatile. 

• Growth in midcap stocks takes a long time to achieve which blocks the investment for the long-term. 

 

 

Top 5 Midcap Stocks 2024

 Here are the top 5 mid-cap stocks that are beaming with high growth potential in 2024: 

 

Deepak Nitrite

This Company operates in Basic Chemicals, Fine and speciality chemicals. These chemicals are used in the manufacturing of colourants, Agrochemicals, Glass, Personal Care, Paper, Textiles, Dyes and detergents. So, the application of the products manufactured by Deepak Nitrite serves both the FMCG and manufacturing Industries. The Chemical sector is currently witnessing tailwinds in India due to the unreliability of China. There were stricter environmental reforms imposed which consolidated the chemical industry in China. Earlier, India’s chemical market also majorly relied on imports. With China’s chemical industry disruption and encouragement of Make in India, the Indian chemical industry gained traction from domestic suppliers but the world also started seeing the Indian chemical industry as an alternative to China. All this puts Deepak Nitrite in a major spot which holds around 70% of the domestic market share for basic intermediate sodium nitrate/nitrite. It also holds around 56% market share of Phenol, Acetone & IPA. 

 

CreditAccess Grameen Ltd. 

CreditAccess Grameen is a non-deposit-accepting NBFC microfinance institution. In the coming years. Many rural areas in India will be urbanized and microfinance institutions will play a major role in this. India is one of the largest microfinance institutions in the world but the penetration of such institutions is less than 40%. This leaves a huge scope for such institutions to grow. This Company has a major focus on Rural areas. As of 31st March 23, the company’s loan portfolio includes 85% borrowers from rural areas and 15% from urban areas. This Company serves villages up to 30 km of radius from each branch office making sure that it reaches the underserved areas. The Company has the largest business operations in Karnataka followed by Maharashtra, Tamil Nadu & Madhya Pradesh. The Company is targeting to increase its penetration in Bihar, the largest market for microfinance loans. The Company has improved its asset quality with a Gross NPA of 0.8% and a Net NPA of 0.2% in Sept’23. It holds around 6% of the market share in the microfinance industry. With Industry tailwinds and healthy asset quality, there is an opportunity for CreditGrameen to increase its penetration. 

 

Polycab India Ltd. 

This Company manufactures and supplies wires, cables and fast-moving electrical goods (FMEG). This Company serves sectors such as Infrastructure, Oil & Gas, Automobiles, Power, Railways, etc. Polycab holds a market share of around 24% in the organised market of the Indian Wire & Cable industry. Currently, many industries such as Residential real estate, Railways and Infrastructure in general are going through an uptrend. This opens a scope for FMEG companies which are integral in the development of these industries. Polycab has maintained a healthy operating margin of around 14% which is higher as compared to peers. 

 

 

Narayana Hrudyalaya

Narayana Hrudyalaya runs multi-speciality hospitals and heart care centres. It owns & operates hospitals in Bangalore, Mysore, Kolkata, Jamshedpur, Guwahati, Raipur, Mumbai, Ahmedabad, Gurugram, New Delhi & Jaipur. The Company provides treatment for Cardiology and Cardiac Surgery, Cancer Care, Orthopaedics, Neurology and Neurosurgery, Nephrology, Gastroenterology, etc.. The Company has earned a strong reputation under the leadership of Dr. Devi Prasad Shetty for providing affordable healthcare. In FY23 & FY24, the Company has made significant capex towards the acquisition of Sparsh, expansion and maintenance of existing facilities. Though most of these expansions were funded through debt, the company enjoys a positive operating cash flow to support interest payment and debt repayment. It has improved its EBITDA margin from 19% in Q2 FY23 to 20.3% in Q2 FY24. 

 

KPIT Tech

This Company provides embedded software, AI and digital solutions. The Company mainly serves the mobility industry by supplying software solutions to automotive OEMs and Tier-1 suppliers. Its client base includes the top 20 global OEMs. Despite operating in a niche segment, the company has maintained a healthy operating margin of around 19%. With the expansion of the Consumer Electric Vehicle market, this company could be at the forefront to make the most of this opportunity. Also, the current automotive industry is shifting to Software-defined Vehicles. The Company also has a global presence in Europe, the USA, China, Thailand and Japan. 

 

To be Concluded

So, these were some mid-cap stocks that are going to experience tailwinds in 2024 and investors can keep a close look for higher returns.