Ready to roar? Battered midcaps with 15%-plus growth could be value picks

Several midcap stocks, which saw a sharp price correction recently, have reported healthy growth in revenue and profitability. Companies such as Motilal Oswal Financial Services, Aditya Birla Capital, Bhansali Engineering, Capital First, JM Financials, Meghmani Organics and Himadri Speciality Chemicals are among those that clocked over 15% growth in revenue and net profit for all the four quarters of the previous financial year. Yet, their stock prices are trading 10-50% lower than their annual highs.

Investors picking stocks on their own should take advantage of this correction to reposition their mid-cap portfolio, suggest market experts. Some of the quality midcap stocks were corrected not because of fundamental reasons but due to trade war, rising commodity prices, the prospects of hardening interest rates and the political concerns.

“This is precisely the opportunity for buying into mid/small-cap space as a result of attractive valuations Vs their long term historical valuation multiples,” said Ajay Bodke, CEO-PMS, Prabhudas Lilladher