UBS midcap stock picks 2026: India’s small and midcap stocks have been underperformers in 2025 after several years of strong performance, and valuations, while lower than last year, are still not cheap, according to a recently released report by UBS Global Research. The firm listed the top 8 midcap stocks to buy for 2026, projecting potential gains of up to 83%.
The report highlights India’s midcap resilience amid valuation corrections and emphasises earnings visibility as the key driver of performance over the next 12–18 months. Stocks such as Shaily Engineering Plastics, Max Healthcare, and APL Apollo Tubes feature prominently on UBS’s radar, backed by robust margins and growth outlooks.
“After outperforming the Nifty significantly over the previous two years, SMIDs underperformed large caps in 2025,” UBS said. The report noted that while the Nifty rose about 10% last year, the Nifty Midcap 100 gained 5%, and the Nifty Smallcap index declined 7%. UBS added that despite this recent underperformance, small and midcapstocks have still generated stronger compounded returns than the Nifty over the past five years, supported mainly by sustained domestic fund inflows.
UBS’s midcap outlook for 2026
UBS said the valuation correction in mid-caps during 2025 was limited. “Based on consensus earnings estimates, the Midcap index is trading close to its last-five-year average one-year-forward PE compared with a 21% premium a year ago,” UBS said. The brokerage added that while valuations are no longer stretched, they are also not at levels that support a broad-based rebound across the segment.
UBS top 8 midcap stocks to buy for 2026
Despite its cautious view on the broader segment, UBS named eight mid-cap stocks it expects to outperform in 2026, based on earnings visibility, margins and company-specific drivers.
UBS on Shaily Engineering Plastics: ‘Buy’
UBS said Shaily Engineering Plastics stands out as a beneficiary of demand linked to generic GLP-1 products. “Shaily Engineering: as a key beneficiary of the launch of generic GLP-1,” UBS said. UBS has set a target price of Rs 4,000, implying an upside of 83%.
UBS on Max Healthcare Institute: ‘Buy’
UBS said Max Healthcare Institute offers improved growth visibility following capacity additions over the past two years. “We see upside potential for Max Health, with improving growth visibility in the near to medium term due to capacity additions over the past two years,” UBS said. The target price is Rs 1,475, with an upside of 45%.
UBS on Indian Hotels Company: ‘Buy’
UBS said it remains positive on Indian Hotels Company despite concerns around a possible peak in the hospitality cycle. “Despite market concerns about a potential cycle peak, we maintain a positive outlook on Indian Hotels,” UBS said. The brokerage has set a target price of Rs 900, indicating a 30% upside.
UBS on Shyam Metalics and Energy: ‘Buy’
UBS said Shyam Metalics and Energy is positioned to benefit from rising commodity prices while adding capacity in value-added products. “Shyam Metalics: as a beneficiary of rising commodity prices, while adding new capacities in value-added products,” UBS said. The target price is Rs 1,350, with an upside of 68%.
UBS on Fortis Healthcare: ‘Buy’
UBS said Fortis Healthcare continues to see margin improvement, supported by brownfield capacity additions. “We expect its margin trajectory to continue to surprise positively, as upcoming brownfield capacities aid growth,” UBS said. The target price is Rs 1,150, with an upside of 29%.
UBS on Astral: ‘Buy’
UBS said Astral is positioned to benefit from improving demand, stable or favourable PVC prices and margin improvement through backward integration. “We think Astral is poised for growth on improving demand, stable or favourable input prices and margin improvement potential through backward integration,” UBS said. The target price is Rs 1,902.90, implying a 32% upside.
UBS on APL Apollo Tubes: ‘Buy’
UBS said APL Apollo Tubes could see earnings improvement as margins rise and market share expands. “EBITDA per ton improvement may surprise the market, as it continues to gain market share,” UBS said. The brokerage has set a target price of Rs 1,900, suggesting a 16% upside.
UBS on Delhivery: ‘Buy’
UBS said Delhivery is well placed to benefit from efficiency and pricing gains, with the impact from Valmo expected to ease. “Delhivery: it is in a strong position to benefit from efficiency and pricing, while the Valmo impact may bottom out in upcoming quarters,” UBS said. The target price is Rs 580, with an upside of 46%.
Conclusion
UBS said the midcap segment is no longer supported by rising valuations and that performance in 2026 will depend on company-level execution. With valuations closer to long-term averages and fund managers leaning toward large-cap stocks, UBS said only select companies with visible earnings growth and margin improvement are likely to perform better, which is reflected in its list of top picks.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.