Best Mid-Cap Stocks in India

In India, midcap companies refer to businesses that are not large like blue-chip companies but also not as small as small-cap firms. These have a market capitalisation between ₹5,000 crore and ₹20,000 crore. Investors seeking investment opportunities in the Indian market often get attracted to midcap stocks because they offer a unique balance of growth potential and stability. In this article, we explore the best midcap stocks in India that have caught the attention of investors with their promising performance and prospects for the future.  

5 Best Midcap Stocks in India 2023

Note: The list of the top midcap stocks here is dated as of July 6, 2023. The stocks are sorted according to their 5-yr CAGR. 

Info Edge India Ltd

Info Edge is an online classified company that owns several brands, such as Naukri, 99acres, Jeevansathi, and Shiksha. The company is almost debt-free and has generated good 3 and 5-year returns. It is one of the top midcap stocks to invest in 2023.  

Key financial highlights of the company

• Dividend yield: 0.43%
• 5-year return on equity: 7%
• Profit in FY 2023: – ₹70 crore

Muthoot Finance Ltd

Muthoot Finance is an Indian NBFC that primarily offers personal and business loans secured against gold jewellery. It offers several types of gold loans and online digital loans. The company has maintained a healthy dividend payout percentage over the years. 

Key financial highlights of the company

• Dividend yield: 1.75%
• 5-year return on equity: 23%
• Profit in FY 2023: ₹3,474 crore 

Relaxo Footwears Ltd

Relaxo Footwears is the largest footwear manufacturing company in India in the non-leather segment. It operates in the major categories of rubber slippers, EVA and PU slippers, sports and canvas shoes, sporty slippers, etc. Relaxo owns several popular brands, including Bahamas, and Flite. The company is almost debt-free and has maintained a healthy dividend payout percentage. 

Key financial highlights of the company

• Dividend yield: 0.27%
• 5-year return on equity: 15%
• Profit in FY 2023: ₹154 crore 
• Canara Bank Ltd

The Indian bank engages in retail and wholesale banking, treasury, life insurance, asset management, and other banking operations. Canara Bank provides personal, corporate, and non-Indian banking, online banking, and micro, small, and medium enterprise (MSME) banking solutions. The bank has provided a good dividend yield over the years.  

Key financial highlights of the company

• Dividend yield: 3.68%
• 5-year return on equity: 7%
• Profit in FY 2023: ₹11,345 crore 
• Crompton Greaves Consumer Electrical Ltd.

The India-based consumer electric company operates in two segments: Electrical Consumer Durables (ECD) and lighting. It manufactures and distributes a wide range of products. The company has maintained a healthy dividend payout percentage. Also, it has successfully reduced its debt burden, making it worthy of consideration as one of the top midcap stocks. 

Key financial highlights of the company

• Dividend yield: 1.04%
• 5-year return on equity: 29%
• Profit in FY 2023: ₹476 crore 

Reasons to Invest in midcap Stocks

• Growth potential: Midcap companies have better growth opportunities than large companies. These companies are typically in a phase of expansion and have more room for substantial upward movement. They are not grown companies like large-cap, but they have the potential to become one. As midcap companies grow, they increase their market share, and investors can benefit from their growth propensity in terms of higher capital appreciation. 
• Underappreciated stocks: Often, midcap stocks are undiscovered by institutional investors and analysts. These stocks may be undervalued because of their smaller market presence, allowing investors to buy them at attractive prices before the broader market discovers their true potential.   
• Agility and flexibilities: Unlike large-cap companies, midcaps are more flexible and can adapt quickly to evolving industry trends. This agility allows them to capitalise on emerging opportunities, potentially leading to more growth and better investment returns.
• Lower-risk saturation: Midcaps often operate in undiscovered or new markets where the opportunities are not yet saturated. It provides them with more room for expansion, and they can tap into new customer segments or markets. By investing in these companies, investors can participate in the early stages of industry growth and reap the benefits when the company gains market share. 
• Diversification benefits: Midcap stocks can offer diversification benefits. By allocating a portion of your investment into midcap stocks, you can reduce concentration risk and balance your portfolio’s exposure across different market segments.

Final Words

Higher growth potential, underappreciated status, agility, lower risk of saturation, and diversification benefits make mid-cap stocks an attractive addition to a well-rounded investment portfolio. However, it is important to consider your investment objective and risk appetite before investing. If you want to explore investment opportunities in midcap stocks, open a Demat account with Angel One today!

Disclaimer: This article has been written for educational purposes only. The securities quoted are only examples and not recommendations.