Midcap stocks present a high-risk, high-reward investment opportunity.
They may be well-suited for seasoned investors who are prepared to conduct in-depth research and actively manage associated risks. That said, investors should exercise caution and consider multiple factors, before investing.
In this editorial, we present three mid-cap stocks worth adding to your watchlist.
These have been chosen from the Nifty MidSmall Financial Services Index, which tracks the performance of mid-cap and small-cap companies within the financial services sector. Although the index comprises 30 constituents, we have narrowed it down to three companies that stand out as leaders in their respective segments to present the top three picks.
Essentially, the top stocks are determined based on their leadership within their respective industry
picked from among the Nifty MidSmall Financial Services Index.
#1 MCX
First on our list is MCX.
MCX (Multi Commodity Exchange of India) is the largest commodity derivatives exchange in India, commanding an overwhelming market share in the commodity futures market of 98.8%. It offers trading a diverse range of commodities, spanning multiple segments including bullion, energy, metals and agri commodities, as well as sectoral commodity indices.
The company performed well in Q2 FY26. Revenue from operations grew to Rs 3,742.3 m, a growth of 31% over Q2 of the previous year. Profit after tax at Rs 1,974 m, surged 29% year-on-year (YoY). The average daily turnover of futures and options increased by 87% YoY at Rs 4,112.7 bn from Rs 2,202.4 bn.
MCX recently launched Cardamom Futures Contract (effective from July 2025) with expiry in August, September, October, and November 2025. MCX also launched monthly options contracts on the MCX iCOMDEX Bullion Index – MCX BULLDEX, covering both gold and silver effective October 2025.
Moving ahead, MCX stands to gain driven by rising commodity trading volumes, new product expansion, and technological upgrades. The innovations like blockchain integration, AI for trading systems, and enhanced risk management further improve prospects for the company.
MCX’s focus on creating indigenous benchmarks for commodity pricing, expanding options trading on various commodities, and improving trading platform technology also place it in a favourable position for future growth.
With India’s expanding role in global commodity trading, these advancements in trading infrastructure and product diversification foster long-term growth potential.
#2 Muthoot Finance
Muthoot Finance is India’s largest gold loan non-banking financial company (NBFC), offering a wide range of gold loan products with fast approvals and flexible repayment options.
They serve customers across more than 4,200 branches, providing loans secured by gold jewellery with amounts ranging from as low as Rs 1,500 to as high as Rs 50 m, depending on the scheme.
On the financial front, net interest income grew to Rs 47.11 bn in Q2 FY26 from Rs 31.21 bn YoY. The profit after tax for Q2 FY26 stood at Rs 23.45 bn against Rs 12.51 bn in Q2 FY25, an increase of 87% YoY.
Muthoot Finance consolidated loan assets under management grew 42% YoY to Rs 1,476.7 bn in H1 FY26 against Rs 1,041.4 bn in H1 FY25. During the half year, consolidated loan assets under management grew Rs 254.93 bn, growth of 21%.
In view of this performance, the company has upgraded its FY26 gold loan growth guidance from 15% to 30-35%.
Moving ahead, Muthoot Finance intends to expand its non-gold loan portfolio including personal loan, home loan and business loan while maintaining its total non-gold loan AUM including microfinance at about 12-15% of the consolidated loan portfolio.
The company is accelerating its digital transformation to deliver faster, more seamless credit access for millions of customers nationwide. With a strong branch network, a trusted brand, and investments in technology and innovation, Muthoot Finance is well-positioned to deliver sustained growth throughout FY26 and beyond.
#3 Computer Age Management Services (CAMS)
With over three decades of extensive experience and in-depth domain knowledge, CAMS is as India’s leading and fastest-growing Qualified Registrar and Transfer Agent (QRTA) for Mutual Funds (MFs). The company caters to ten of the fifteen largest MFs by Average Assets Under Management (AAUM), including the top four.
Additionally, the company offers tech-enabled financial infrastructure and services, supporting a diverse range of financial institutions such as MFs, Alternative Investment Funds (AIFs), insurance companies, and more.
On the financial front, the net sales for Q2 FY26 improved marginally to Rs 3,767 m from Rs 3,652 m YoY. The net profits of the company dropped to Rs 1,140 m from Rs 1,208 m YoY. Moving ahead, the company has announced plans to catalyse the growth of mutual funds industry by further bolstering its operating infrastructure, talent, and technological spine.
CAMS stated that it’s future proofing its platform through integration of AI and other advanced technologies, in order to support the sustained growth of the industry in the coming years, to host up to 8 new AMCs annually and assist multiple new fund houses in going live on the basis of recently issued licenses.
In addition, CAMS is positioning itself to support its clients for the launch of SIF schemes in the coming months, a new asset class which is beginning to evoke significant market interest. As part of the platform re-architecture roadmap, CAMS has announced the launch of CAMSLens and is planning to make 4 more AI integrations over the next two quarters, which will significantly add toits scale capability and operating efficiency.
Should you Consider Midcap Financial Services Stocks?
Midcap financial services stocks are generally suitable only for investors with a high-risk appetite. Investors should conduct thorough research to assess the fundamentals, track records, and growth prospects of these companies.
Although there are risks involved, investors have also achieved significant returns in the past.
Investors should evaluate the company’s fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here…
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