The research report added that on the year-to-date (YTD) basis, the Nifty Midcap100 is down just 2 per cent as compared to the broader Nifty 50 index which is down 6 per cent.
The broader market indices have performed better than the equity benchmarks so far in August. Headline indices, S&P BSE Sensex and Nifty 50 gained up to 4.40 per cent, while midcaps and smallcaps have outshined significantly. The S&P BSE Midcap index has gained 9 per cent so far this month, while S&P BSE Smallcap has jumped 11.17 per cent. On the other hand, Nifty Midcap 50 has managed to gain 11.33 per cent while the Nifty Smallcap 50 jumped 11.76 per cent till Friday’s close. “Midcaps have started performing over the last two months, post its underperformance over more than the two years,” said Motilal Oswal Financial Services in a High conviction basket ideas report.
The report also added that on the year-to-date (YTD) basis, the Nifty Midcap100 is down just 2 per cent as compared to the broader Nifty 50 index which is down 6 per cent. The research and brokerage firm has listed five high conviction mid-cap ideas across various sectors with an equal weightage of 20 per cent each, which it expects to do well in the short to medium term. “One can buy this basket of 5 stocks with a potential upside of 10-15 per cent over a time frame of 1-3 months,” it said in a report.
ICICI Securities: ICICI Securities shares jumped over 4 per cent to Rs 486.75 apiece on BSE. Last month, the stock hit a fresh 52-week of Rs 568.75 per share. As per the brokerage firm, the company is a play on increasing financialisation of savings and retail participation in equity markets. The brokerage firm added that the ongoing challenges in the industry are driving incremental market share toward large, institution backed brokers like ICICI Securities. “We expect revenue and PAT to grow at 14 per cent and 19 per cent CAGR, respectively, over FY20-23E.
Laurus Labs: The pharmaceuticals company stock price surged 7.6 per cent in trade to hit a fresh 52-week high of Rs 1,229.50 apiece on BSE. Laurus Labs has shown strong improvement in performance primarily led by a doubling of formulation sales, 30 per cent growth in each API and CDMO segment supported with 780bp margin expansion. “We remain positive on Laurus on the back of superior execution across revenue segments, resulting in expansion of ROE to 27% and sufficient levers to sustain the earnings momentum,” Motilal Oswal said.
Tata Power: The company will benefit from asset monetisation and better working capital management leading to net debt reduction, said the brokerage firm. Further infusion of Rs 2,600 crore from promoters would aid debt reduction. The brokerage firm noted that the approval of a tariff hike at Mundra, possible benefits from the merger of CGPL (Coastal Gujarat Power) and Tata Power Solar with the company, and favorable Infrastructure Investment Trust (InvIT) valuations provide upsides.
Crompton Greaves Consumer Electricals: The household appliances stock price has surged over 50 per cent from March lows of Rs 177.90 apiece to today’s high. The brokerage firm in its report stated that the company’s efforts to improve its leadership position in the Fans segment and good start in the new category of Water heaters and Air coolers, despite the ongoing disruption is commendable. With strong profitability and an asset-light business model, return ratios are healthy, it added.
Bharat Electronics Ltd: According to the Motilal Oswal Financial Services, BEL is well-positioned to benefit from rising defence expenditure, supported by strong manufacturing and execution, relationship with defence and government agencies, strategic collaboration with foreign technology partners, in-house R&D capabilities, and an increased focus on exports may provide further support to the stock.
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