Did mid-caps capture alpha story in December 2024?

3 Jan 2025 , 09:43 AM

MID CAPS STRUGGLE FOR ALPHA, BUT SHOW RESILIENCE

There was a unique trend seen in mid-caps. The money gravitated towards the tried and tested mid-cap names. For December, the mid-cap index generated just about 0.79% amidst a host of uncertainties. The volatile oil prices and the weak rupee had an oversized impact on mid-cap stock performance as the preference was only for the tried and tested names. Despite the recent correction, there are concerns over mid-cap valuation, especially considering that the mid-caps have also rallied after the recent correction. However, for the investors, it is time to separate the wheat from the chaff in the mid-cap space and the money now appears to be flowing towards stable business models. The mid-cap is also getting a lot more sector agnostic.

HOW DID MID-CAP STOCKS FARE IN DECEMBER 2024

The correction in mid-caps was nowhere close to the intensity of October, but the returns were tepid in December as the weak rupee put pressure on mid-caps.

• For the month of December 2024, Nifty Mid-Cap 100 gained 0.79%. Out of the 94 mid-caps with full data, 10 companies generated double-digit returns and 22 companies gave over 5%. However, only 33 out of 94 companies gave positive returns in December.
• For the year to December 2024, Nifty Mid-Cap 100 gained 23.84%. Out of the 94 mid-caps with full data, 7 companies generated over 100% returns, and 22 companies over 50%. Total of 64 out of 94 companies gave positive returns in year to December 2024.
• What about resilience? Nifty Mid-Cap 100 bounced 28.3% from the lows. Out of the 94 mic-caps with full data, 3 companies bounced over 200%, 12 companies bounced over 100%, and 34 bounced over 50%. Total of 17 companies bounced under 10% from lows.
• What about swing, or proximity to high price. The index overall had a swing factor of 4.6%. A total of 26 out of 94 companies are less than 10% from the peaks.

Let us look at mid-cap stocks from the perspective of momentum?

HOW WERE MID-CAP MOMENTUM RETURNS IN DECEMBER 2024

In terms of 1-month returns, the Nifty Mid-Cap 100 gave 0.79%. Out of the 94 eligible stocks in the index, only 33 stocks gave positive returns. Here are the top-15.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
IGL	430.00	19.43	-3.66	570.35	306.10	40.48%	24.61%
BSE	5,493.90	18.89	142.67	5,837.95	1,941.05	183.04%	5.89%
MUTHOOTFIN	2,253.00	14.44	52.27	2,268.00	1,261.90	78.54%	0.66%
LUPIN	2,392.00	14.27	69.61	2,402.90	1,332.00	79.58%	0.45%
JUBLFOOD	754.90	13.39	32.33	759.90	421.05	79.29%	0.66%
MAXHEALTH	1,155.00	11.81	68.12	1,215.55	669.45	72.53%	4.98%
KPITTECH	1,486.35	11.32	1.72	1,928.70	1,283.25	15.83%	22.94%
COFORGE	9,675.00	10.54	59.46	10,026.80	4,287.25	125.67%	3.51%
PAYTM	981.00	10.23	51.68	1,062.95	310.00	216.45%	7.71%
MANKIND	2,898.80	10.11	36.72	3,054.80	1,901.05	52.48%	5.11%
OBEROIRLTY	2,281.15	9.92	58.03	2,343.65	1,268.15	79.88%	2.67%
INDHOTEL	876.40	9.06	99.36	894.90	429.25	104.17%	2.07%
POLICYBZR	2,198.00	8.95	168.73	2,230.00	767.25	186.48%	1.43%
IREDA	221.60	8.73	114.26	310.00	100.20	121.16%	28.52%
IRB	60.06	8.61	44.16	78.15	41.05	46.31%	23.15%

Data Source: NSE

For October 2024, 10 stocks gave double digit returns and 22 stocks gave over 5% in the month of December 2024. In terms of sectoral mix; the top-15 had 4 BFSI stocks (BSE, Muthoot Finance, Paytm, and IREDA), 3 healthcare stocks (Lupin, Mankind, and Max Health), and 2 IT stocks (KPIT Technologies and Coforge). The worst performers in December 2024 were largely bottom-up plays, so they were sectorally spread out.

HOW MID-CAPS DELIVERED ON 1-YEAR RETURNS?

Mid cap stocks as a whole, delivered 23.84% in last one year. Out of 94 mid-cap stocks, 7 stocks more than doubled yoy, while 22 stocks gave over 50% returns. A total of 28 stocks gave negative returns yoy. Here are the top-15 on 1-year returns.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
DIXON	18,341.70	7.34	184.88	19,148.90	5,782.85	217.17%	4.22%
OFSS	12,650.00	2.97	182.78	13,220.00	4,291.00	194.80%	4.31%
POLICYBZR	2,198.00	8.95	168.73	2,230.00	767.25	186.48%	1.43%
BSE	5,493.90	18.89	142.67	5,837.95	1,941.05	183.04%	5.89%
RVNL	430.00	-2.05	136.78	647.00	177.50	142.25%	33.54%
IREDA	221.60	8.73	114.26	310.00	100.20	121.16%	28.52%
KALYANKJIL	789.05	7.44	113.91	795.40	321.95	145.08%	0.80%
INDHOTEL	876.40	9.06	99.36	894.90	429.25	104.17%	2.07%
HUDCO	242.65	-0.08	87.02	353.70	122.70	97.76%	31.40%
VOLTAS	1,835.00	6.15	84.13	1,944.90	968.00	89.57%	5.65%
INDUSTOWER	346.10	-0.78	70.15	460.35	197.25	75.46%	24.82%
LUPIN	2,392.00	14.27	69.61	2,402.90	1,332.00	79.58%	0.45%
MAXHEALTH	1,155.00	11.81	68.12	1,215.55	669.45	72.53%	4.98%
CUMMINSIND	3,265.00	-5.82	64.75	4,171.90	1,927.00	69.43%	21.74%
CGPOWER	748.00	-1.88	63.92	874.70	414.30	80.55%	14.48%

Data Source: NSE

On a yoy basis, the list was spread out across sectors, since it was more of a bottom up story for mid-caps. The remaining stocks in the above list, were largely spread out across sectors including New Energy, Microchips, EMS, financial inclusion, and ecommerce. The list at the bottom was BFSI dominated, including Bandhan Bank, Poonawala, AU Bank, IDFC First, Yes Bank etc.

HOW RESILIENT WERE MID-CAP STOCKS IN LAST ONE YEAR?

In terms of bounce from the lows, the mid-caps overall bounced 28.29%. Total of 15 stocks more than doubled, and 34 jumped over 50%. Top-20 average bounce was 137.12%.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
PERSISTENT	6,475.00	8.50	-12.17	6,788.90	1,790.09	261.71%	4.62%
DIXON	18,341.70	7.34	184.88	19,148.90	5,782.85	217.17%	4.22%
PAYTM	981.00	10.23	51.68	1,062.95	310.00	216.45%	7.71%
OFSS	12,650.00	2.97	182.78	13,220.00	4,291.00	194.80%	4.31%
POLICYBZR	2,198.00	8.95	168.73	2,230.00	767.25	186.48%	1.43%
BSE	5,493.90	18.89	142.67	5,837.95	1,941.05	183.04%	5.89%
MAZDOCK	2,254.00	-50.63	-0.14	2,930.00	897.70	151.09%	23.07%
KALYANKJIL	789.05	7.44	113.91	795.40	321.95	145.08%	0.80%
RVNL	430.00	-2.05	136.78	647.00	177.50	142.25%	33.54%
COFORGE	9,675.00	10.54	59.46	10,026.80	4,287.25	125.67%	3.51%
IREDA	221.60	8.73	114.26	310.00	100.20	121.16%	28.52%
INDHOTEL	876.40	9.06	99.36	894.90	429.25	104.17%	2.07%
HUDCO	242.65	-0.08	87.02	353.70	122.70	97.76%	31.40%
POLYCAB	7,399.10	-0.14	37.31	7,605.00	3,801.00	94.66%	2.71%
OIL	464.00	-8.81	14.04	767.90	241.60	92.05%	39.58%

Data Source: NSE

On resilience score, the list was dominated by 6 new age tech (Persistent, Dixon, Paytm, OFSS, Policybazaar, and Coforge). There were also 3 PSUs in the list. The remaining stocks in the above list, were largely spread out and synced with 1-year return rankings list. The list at the bottom was Astral, Bandhan Bank, Tata Tech, Yes Bank, Concor, SAIL, SRF etc.

HOW CLOSE WERE MID-CAPS TO THE YEARLY HIGHS?

In terms of proximity to the peak, the index was just 4.62% short of the peak. Total of 26 stocks are less than 10% to the peak while 17 stocks are over 30% from the peak levels.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
LUPIN	2,392.00	14.27	69.61	2,402.90	1,332.00	79.58%	0.45%
JUBLFOOD	754.90	13.39	32.33	759.90	421.05	79.29%	0.66%
MUTHOOTFIN	2,253.00	14.44	52.27	2,268.00	1,261.90	78.54%	0.66%
KALYANKJIL	789.05	7.44	113.91	795.40	321.95	145.08%	0.80%
POLICYBZR	2,198.00	8.95	168.73	2,230.00	767.25	186.48%	1.43%
INDHOTEL	876.40	9.06	99.36	894.90	429.25	104.17%	2.07%
OBEROIRLTY	2,281.15	9.92	58.03	2,343.65	1,268.15	79.88%	2.67%
POLYCAB	7,399.10	-0.14	37.31	7,605.00	3,801.00	94.66%	2.71%
PAGEIND	48,150.00	4.19	21.94	49,849.95	33,070.05	45.60%	3.41%
COFORGE	9,675.00	10.54	59.46	10,026.80	4,287.25	125.67%	3.51%
DIXON	18,341.70	7.34	184.88	19,148.90	5,782.85	217.17%	4.22%
OFSS	12,650.00	2.97	182.78	13,220.00	4,291.00	194.80%	4.31%
PERSISTENT	6,475.00	8.50	-12.17	6,788.90	1,790.09	261.71%	4.62%
MAXHEALTH	1,155.00	11.81	68.12	1,215.55	669.45	72.53%	4.98%
MANKIND	2,898.80	10.11	36.72	3,054.80	1,901.05	52.48%	5.11%

Data Source: NSE

In terms of proximity to the peak, the list is dominated by New Age Technology (Policybazaar, Coforge, Dixon, OFSS, and Persistent), Healthcare (Lupin, Mankind, Max Health), and Consumer Services (Jubilant Foodworks, Indian Hotels, Kalyan Jewellery, and Page Industries). Companies farthest from the peak were largely PSUs, financials, and defence stocks. Most of these stocks are facing resistance ahead.

While bottom fishing is evident in mid-caps to some extent, the preferred stocks are still the ones from technology and financial services space.