Broader markets have continued to outperform benchmark indices. In the last 1 year, the Nifty Midcap index has risen around 26 percent, in comparison, the Nifty50 is up around 16 percent in this period.
87 stocks in the Nifty Midcap 100 index have given positive returns to their investors in the last 1 year with 5 of them more than doubling their returns in this span of time. Only the remaining 13 midcap stocks in the index are in the red.
Among stocks, Adani Total Gas surged 376 percent in the last 1 year followed by JSW Energy, up 325 percent. Meanwhile, Tata Elxsi, Deepak Nitrite and MindTree also rose between 120-165 percent in this period.
Mphasis, Polycab, Coforge, Tata Chemicals, ICICI Securities, L&T Tech Services, Prestige Estates and Navine Fluorine added over 60 percent each in the last 1 year.
| Midcap Stocks | 1-year gain (%) |
| Adani Total Gas | 377% |
| JSW Energy | 322% |
| Tata Elxsi | 165% |
| Deepak Nitrite | 129% |
| MindTree | 123% |
| Mphasis | 85% |
| Polycab India | 83% |
| Coforge | 79% |
| Tata Chemicals | 78% |
Among losers, IndiaMart fell the most over 45 percent while Whirlpool, Mahanagar Gas, MRF and Alembic Pharma shed over 20 percent each.
In the last 20 years, midcaps have outperformed largecaps. Since its inception, the benchmark Nifty50 has seen a CAGR of 13.3 percent while the Nifty Midcap100 index has a CAGR of 16.7 percent. Also, the midcap index has delivered positive returns in 14 out of 20 years.
However, it is important to note that while midcaps may offer higher returns, it also comes with a higher risk as compared to largecap stocks. Only investors with a high-risk appetite should consider investing heavily in midcap stocks while those with a conservative risk appetite should prefer to stay away.
Going ahead, global brokerage Jefferies stated that likely domestic cyclical recovery and global liquidity could aid midcaps in 2022.
"In 2022, the key focus themes could be housing upcycle - to benefit building materials, B2C resumption, formalization (Electricals, Pipes, Tiles), Indigenization push, PLIs (production-linked incentive schemes) and input cost trend and price hikes (market leaders to benefit)," the report added.
Axis Securities also believe that midcap stocks provide attractive investment opportunities in the broader market at current levels. It added that the long-term story for the equity market remains intact, as the positive structure emerging with an increase in Capex spending, that will enable banks to improve credit growth and the overall increase in the budget expenditure in FY23 will help deliver broad-based growth moving forward.
Federal Bank, Varun Beverages, Bata India and KIMS are its top midcap picks for the near term.
