How did Mid-Cap Nifty stocks perform in last one year?

24 Nov 2023 , 09:19 AM

Alpha hunting in the mid-cap stocks

Where do investors typically look for alpha in India. OK, by Alpha we mean excess returns that an investor earns, over and above what the market risk earns. To put in simple terms; if you hope to earn 14% a year on your portfolio and if you end up with 16%, then the additional 2% is your alpha. However, alpha does not come easy. Most of the large cap stocks are closely and intensively tracked. The big opportunities lie in the smaller stocks. Here we look at the stocks in the Nifty Mid-Cap 100 index.

Before we delve deeper into the Nifty Mid-Cap 100, what is so special about these mid-cap stocks. Most of the mid-caps have focused business models and have the potential to become large caps over time. That is the journey that makes them special. Here we take the Nifty Mid-Cap 100 as the proxy for the mid-cap space in India and look at these stock based on 4 key parameters. Firstly, we look at how the Nifty Mid-Cap 100 stocks rank in terms of monthly returns from a short term momentum perspective. Secondly, we look at the Nifty Mid-Cap 100 stocks in terms of the returns they generated over a 1-year period for a longer term view. Thirdly, we look at how far are these stocks from 52-week high prices. Fourthly, we focus on the Nifty Mid-Cap 100 stocks that bounced most from 52-week lows.

How Nifty Mid-Cap 100 stocks fared in terms of 1-month returns

Let us begin with the stocks in the Nifty Mid-Cap 100 that have generated the best returns. We will look at the top 10 stocks but before that, let us take a quick look at the Nifty Mid-Cap 100 overall in terms of 1-month returns. The Nifty Mid-Cap 100 overall has generated returns of 8.27% over the last one month and a whopping 35.27% over the last one year. Out of the 100 stocks in the Nifty Mid-Cap 100, a total of 80 stocks have generated positive returns in the last one month while 19 stocks have given negative returns in the same period. Patanjali has not been considered as it only has data since November 01, 2023.

The best index stock return in the last one month was PFC Ltd at 31.05%, while the worst performance came from Petronet LNG, which fell -10.94% in the last one month. Out of the 100 stocks in the Nifty Mid-Cap 100, a whopping 34 stocks generated double digit returns (>= 10%) in the last 1 month. A total of 19 stocks generated returns of between 5% and 10% in the last one month while 4 stocks generated returns less than 1%, yet positive returns, in last 1 month.

Company	CMP (Rs)	1-Month Returns (%)	1-Year Returns (%)
PFC	320.75	31.05	154.94
TIINDIA	3,414.00	28.32	43.65
ALKEM	4,530.00	28.22	46.70
OBEROIRLTY	1,405.00	26.98	54.92
KPITTECH	1,444.00	25.51	111.56
NYKAA	172.20	23.59	-1.91
IDEA	13.60	23.29	61.68
HINDPETRO	326.25	22.59	43.83
ADANIPOWER	381.40	22.36	–
CGPOWER	460.00	22.23	73.99

Data Source: NSE

The table above has captured the 10 stocks in the Nifty Mid-Cap 100 with the best one-month returns (shaded in blue). Here are some key takeaways? The good news is that there 2 PSU stocks in this list viz., PFC and HPCL. With the rising power capacities across India, the demand for power finance has been on the rise while HPCL has gained from improved marketing margins in the midst of falling crude prices. Interestingly, the only digital stock to appear in this list is Nykaa, the fashion property launched by Falguni Nayyar in 2021.

Among the others, there is not much of a sectoral trend because mid-cap stocks generally tend to be that very stock specific and bottom-up stories. There are some surprise packages in this list. Idea is a surprise package, but the enthusiasm is over the closure of funding round for the company. Let us now turn to the stock that ranked at the bottom in terms of one-month returns in the Nifty Mid-Cap 100 as captured in the table below.

Company	CMP (Rs)	1-Month Returns (%)	1-Year Returns (%)
PETRONET	196.35	-10.94	-5.07
DELHIVERY	383.95	-7.17	15.17
PEL	906.30	-5.86	15.34
DEVYANI	181.50	-4.94	-2.83
ACC	1,819.00	-4.33	-26.23
BANDHANBNK	212.40	-4.11	-0.75
MSUMI	60.45	-3.82	1.90
IDFCFIRSTB	84.25	-3.76	46.48
BALKRISIND	2,554.00	-2.60	28.19
UBL	1,608.30	-1.93	-3.96

Data Source: NSE

Which are the worst performers in terms of one-month returns in the Nifty Mid-Cap 100? There are 2 financial stocks in this list viz., Bandhan Bank and IDFC First Bank. Both the stocks took a hit last month after the RBI decided to hike the risk weight for consumer loans from 100% to 125% capital adequacy. A quick estimate of the impact on the cost of funds shows it could be 75 bps to 100 bps for was likely to be passed on to the end customer. That has pressure on monthly returns of financial stocks. The others are more specific cases like Petronet LNG getting hit by falling crude prices and Delhivery by persistent block selling by large PE funds like Softbank.

How Nifty Mid-Cap 100 stocks fared in terms of 1-year returns

Let us begin with the stocks in the Nifty Mid-Cap 100 that have generated the best returns over the last one year to get a slightly longer term perspective. We will look at the top 10 stocks but, just to recap, the annual returns on the Nifty Mid-Cap 100 at 35.25% has been quite robust. That clearly means there would have been several big ticket performers. Out of the 100 stocks in the Nifty Mid-Cap 100, a total of 76 stocks have generated positive returns in the last one year while only 21 stocks have given negative returns in the last one year.

That only adds up to 97 stocks. That is because, we have left out Adani Power, Patanjali, and Mankind Pharma from the Nifty Mid-Cap 100 rankings due to absence of history. You’re your breath. If you look at 1-year returns, then 6 out of the top-10 by returns are PSU companies. The best stock return was FACT at 446.42%, while the worst performance came from ABFRL at -30.5% in the last one year. Out of the 100 stocks in the Nifty Mid-Cap 100, a total of 10 stocks more than doubled in the last one year, while 69 stocks have generated double digit returns (>= 10%) in the last 1 year. Clearly, there has been alpha, the outperformance has been quit intense.

Company	CMP (Rs)	1-Year Month (%)	1-Year Returns (%)
FACT	705.50	6.85	446.42
RECLTD	341.15	21.20	238.31
RVNL	166.55	5.10	185.86
IRFC	76.45	6.23	164.94
PFC	320.75	31.05	154.94
AUROPHARMA	1,031.70	20.68	129.14
MAZDOCK	1,997.00	1.10	125.77
KPITTECH	1,444.00	25.51	111.56
POLYCAB	5,224.00	3.08	110.86
POLICYBZR	806.85	17.28	104.86

Data Source: NSE

What are the trends we decipher from the top 10 stocks in this 1-year returns (shaded in blue) list? Believe it or not, there are once again 6 PSU stocks in this list based on 1 year returns viz., FACT, REC, RVNL, IRFC, PFC, and Mazagon Docks. There is not much of a sectoral story here, but if you look at the one year return leaders, the only digital stock to feature in the list is Policybazaar. Aurobindo Pharma is a surprise inclusion in the list despite the not-so-positive news flows in the last one year on the counter. Let us not turn to the worst performers in the Nifty Mid-Cap 100 based on 1-year returns as captured in the table below.

Company	CMP (Rs)	1-Month Returns (%)	1-Year Returns (%)
ABFRL	227.50	0.37	-30.50
ACC	1,819.00	-4.33	-26.23
CROMPTON	288.80	3.36	-21.47
FLUOROCHEM	2,799.00	3.53	-19.60
PAGEIND	37,626.65	0.88	-19.55
LAURUSLABS	369.50	3.33	-18.16
BIOCON	234.80	4.31	-16.37
NAVINFLUOR	3,712.00	2.27	-15.79
GUJGASLTD	428.35	4.71	-15.70
LODHA	878.00	10.28	-10.46

Data Source: NSE

There are not too many surprises in this list. Aditya Birla Fashions has had its own share of problems in adjusting and adapting to the new retail order, especially after Reliance has literally bull-dozed the retail industry. Also, ACC has not been in the best of spirits in the aftermath of being taken over by the Adani group and also got hit badly in the aftermath of the Hindenburg saga. Some of the specialty chemical stocks came under pressure due to the global price situation and specialized healthcare companies like Biocon and Laurus Labs also figured in this list.

Nifty Mid-Cap 100 stocks trading nearest to their 52-week highs

While returns are one way of looking at the markets, a better measure (rather complementary measure) of underlying strength is deciphering whether the stock is close to its 52-week high or 52-week low. Here, of course, the subject is the Nifty Mid-Cap 100 index. At a macro level, the Nifty Mid-Cap 100 index is at 42,027 levels and is just about 0.37% away from its 52-week high of 42,184. The underlying bias at an index level for the Nifty Mid-Cap 100 is surely positive. The good news is that 62 out of the Nifty Mid-Cap 100 stocks are less than 10% away from their 52-week highs, which clearly shows which way the wind of the market is blowing. The list below captures the stocks in the Nifty Mid-Cap 100 that are closest to their 52-week highs. Lower this ratio, greater the sign of strength.

Company	CMP (Rs)	52-week High (%)	Fall from 52-week high (%)
OBEROIRLTY	1,405.00	1,415.40	0.73%
ALKEM	4,530.00	4,574.40	0.97%
LODHA	878.00	891.80	1.55%
MFSL	972.75	989.15	1.66%
MRF	1,11,340.00	1,13,439.30	1.85%
TATAELXSI	8,390.00	8,576.05	2.17%
PFC	320.75	328.65	2.40%
AUROPHARMA	1,031.70	1,058.00	2.49%
HINDPETRO	326.25	334.70	2.52%
FORTIS	365.00	374.90	2.64%
RECLTD	341.15	351.00	2.81%
IPCALAB	1,071.00	1,102.05	2.82%
NMDC	172.70	177.80	2.87%
MAXHEALTH	613.80	633.20	3.06%
NHPC	55.10	56.85	3.08%

Data Source: NSE

The 15 stocks above are less than 3.1% away from their 52-week highs and that list has a fairly generous sprinkling of stocks from the pharma, realty, and PSU space. In fact, the healthcare sector shows the real signal of strength in the above list with 5 out of the top 15 belonging to the healthcare space, while 5 are from the PSU space. They appear to be the theme, even in mid-caps. We now turn to the list of stocks that are farthest from their 52-week highs as captured in the table below.

Company	CMP (Rs)	52-week High (%)	Fall from 52-week high (%)
ACC	1,819.00	2,675.00	32.00%
ABFRL	227.50	320.00	28.91%
NAVINFLUOR	3,712.00	4,950.00	25.01%
IGL	390.00	515.70	24.37%
CROMPTON	288.80	376.50	23.29%
PETRONET	196.35	254.40	22.82%
FLUOROCHEM	2,799.00	3,595.00	22.14%
BANDHANBNK	212.40	272.00	21.91%
PAGEIND	37,626.65	47,889.95	21.43%
M&MFIN	272.40	346.55	21.40%
GUJGASLTD	428.35	539.10	20.54%
PEL	906.30	1,139.95	20.50%
DEVYANI	181.50	227.50	20.22%
LAURUSLABS	369.50	459.80	19.64%
MAZDOCK	1,997.00	2,484.70	19.63%

Data Source: NSE

Of course, there are the standard suspects and many of them are also in the top-losers list in the Nifty Mid-Cap 100 index. The above 15 stocks are at least 20% away from the 52-week high price and the list here is dominated by financials and CGD (city gas distributors) players. The pressure on CGD players after Delhi submitted a proposal to convert all commercial vehicles into EVs by 2030. We finally turn to stocks in the Nifty Mid-Cap 100 index based on their bounce from the 52-week lows.

Nifty Mid-Cap 100 stocks versus their 52-week lows

Finally, we turn to stocks in the Nifty Mid-Cap 100 index that have shown the best bounce from the 52-week lows, and also the least bounce. At a macro level, the Nifty Mid-Cap 100 index at 42,027 has bounced 43.93% from the 52-week low of 29,200. Out of the 100 stocks in the Nifty Mid-Cap 100 index, 87 out of the 100 stocks have bounced more than 20% from their 52-week lows, while 48 stocks have bounced more than 50% from the lows of the year. This is clearly a sign of intense resilience in mid-caps. The list below shows the stocks that have shown the best bounce from 52-week lows.

Company	CMP (Rs)	52-week Low (%)	Distance from 52-week Low (%)
FACT	705.50	125.70	461.26%
RECLTD	341.15	99.45	243.04%
PFC	320.75	97.72	228.23%
MAZDOCK	1,997.00	612.00	226.31%
IRFC	76.45	25.40	200.98%
RVNL	166.55	56.05	197.15%
ADANIPOWER	381.40	132.40	188.07%
AUROPHARMA	1,031.70	397.20	159.74%
LODHA	878.00	355.50	146.98%
IDEA	13.60	5.70	138.60%
PRESTIGE	916.00	391.00	134.27%
KPITTECH	1,444.00	622.55	131.95%
BHEL	143.15	66.30	115.91%
PAYTM	921.00	438.35	110.11%
DIXON	5,335.00	2,553.00	108.97%

Data Source: NSE

Many in the above list are also the stocks that have been among the top gainers in the index in the last one year. Interestingly, 7 out of the 15 stocks above are PSU stocks. Finally let us turn to the weak stocks; pretty close to their yearly lows. That is in the table below.

Company	CMP (Rs)	52-week Low (%)	Distance from 52-week Low (%)
PETRONET	196.35	191.70	2.43%
IGL	390.00	375.70	3.81%
PAGEIND	37,626.65	34,952.65	7.65%
GUJGASLTD	428.35	397.05	7.88%
TATACHEM	965.65	876.80	10.13%
FLUOROCHEM	2,799.00	2,534.05	10.46%
NAVINFLUOR	3,712.00	3,356.55	10.59%
VOLTAS	836.00	737.20	13.40%
ACC	1,819.00	1,592.35	14.23%
CROMPTON	288.80	251.00	15.06%
BATAINDIA	1,605.00	1,381.05	16.22%
BANDHANBNK	212.40	182.15	16.61%
UBL	1,608.30	1,353.50	18.83%
FEDERALBNK	147.10	120.90	21.67%
SAIL	89.75	73.75	21.69%

Data Source: NSE

We will focus on the 4 stocks that have bounced less than 10% from their lows and ironically 3 out of these 4 stocks are city gas distributors (CGD) players. We have already explained the reason for the fall in these stocks. Additionally, some of the banks and chemical companies have also struggled to bounce from lower levels as evident in the list of Nifty Mid-Cap 100 stocks.

Clearly, the Nifty Mid-Cap 100 story is not as simple and straightforward and is more bottom-up and micro in nature. The big positives are coming from PSUs and from healthcare and that is the good news for the Nifty Mid-Cap 100 index.