Best Mid-cap Stocks to Buy in India for a Diversified Portfolio (2024)

Investing in the stock market can feel like a balancing act, where you’re constantly weighing risk against reward. Large-cap stocks often provide stability but may lack the excitement of rapid growth, while small-caps can offer high returns at the expense of higher volatility. However, mid-cap stocks sit in the middle, offering a blend of both worlds. If you’re someone who wants to see your investments grow steadily without the extreme ups and downs of the stock market, check out the potential of mid-cap shares. But how do you know if they’re the best mid-cap stocks to buy for your financial goals? In this comprehensive guide, we’ll explain what mid-cap stocks are, explore some of the top mid-cap shares in India and how to invest in them.

What are Mid-cap Stocks?

Mid-cap stocks in India have a market capitalisation of more than ₹5,000 crores but less than ₹20,000 crores and fall in between small-cap stocks and large-cap stocks. Mid-cap companies in India tend to show an upward trend in their market capitalisation, valuation and profits.

List of Trending Mid-cap Stocks in India (2024)

Here is a list of some of the best mid-cap stocks to buy in India (2024). 

Stock Name	Sub-Sector	Market Cap (in Cr)	Close Price	PE Ratio	1Y Return	Fundamental Score
Ge T&D India Ltd	Heavy Electrical Equipments	43,355.08	1691.40	239.46	326.35	4.15
Godfrey Phillips India Ltd	FMCG - Tobacco	40,068.46	7580.55	45.38	276.29	5.17
Motilal Oswal Financial Services Ltd	Diversified Financials	46,127.60	774.95	18.90	252.47	11.00
Housing and Urban Development Corporation Ltd	Specialized Finance	49,066.57	240.80	23.18	237.37	7.26
Oil India Ltd	Oil & Gas - Exploration & Production	1,00,109.58	595.00	15.80	222.96	5.75
Hitachi Energy India Ltd	Heavy Electrical Equipments	55,686.98	12927.20	340.01	212.74	3.80
Prestige Estates Projects Ltd	Real Estate	82,588.21	1874.40	60.10	212.43	4.81
Kalyan Jewellers India Ltd	Precious Metals, Jewellery & Watches	73,511.39	697.40	123.06	210.81	2.61
Dixon Technologies (India) Ltd	Home Electronics & Appliances	84,317.54	14061.00	229.28	186.39	8.00
BSE Ltd	Stock Exchanges & Ratings	45,130.42	3896.15	57.98	167.48	8.13

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data is from 18th September 2024. However, for real-time updates on stock prices and market trends, visit the Tickertap Stock Screener today!

Filters:

Market Cap > mid-cap

1Y Return: Sorted by Highest to Lowest

Fundamental Score: Set to Positive

Best Mid-cap Stocks in India: An Overview

Here is a brief overview of the best mid-cap companies in India. These are considerably good mid-cap stocks on the NSE that you can consider for investments in 2024.

GE T&D India Ltd

GE T&D India is a leading player in the power transmission and distribution sector, offering a range of products and services to enhance the electricity grid infrastructure. As a key contributor to India’s energy sector, the company is crucial in addressing the growing energy demands and modernising grid capabilities.

The company is expected to see a notable revenue growth of 39.34% in the next year, a stark contrast to the last three years’ CAGR revenue decline of -3.24%. Additionally, its earnings growth is projected to rise by 144.66%, a remarkable increase compared to the 44.25% CAGR earnings growth over the last three years, indicating a turnaround in profitability.

Godfrey Phillips India Ltd

Godfrey Phillips is one of India’s largest cigarette manufacturers, with a diverse product portfolio that also includes chewing products and branded retail. The company has consistently shown strong financial performance, thanks to its dominant market presence and growing consumer demand.

Over the last five years, the company’s revenue has grown at an annual rate of 12.63%, outperforming the industry average of 8.03%. Its expected earnings growth for the next year stands at 33.25%, slightly above the last three years’ CAGR earnings growth of 32.86%, demonstrating continued strong financial health.

Motilal Oswal Financial Services Ltd

Motilal Oswal is a well-established financial services company providing a wide array of investment solutions, including asset management, broking, and wealth management. It has built a reputation for consistent growth and innovation in the financial services space.

Over the past five years, the company’s revenue has increased at a yearly rate of 23.7%, substantially higher than the industry average of 11.27%. Its net income has seen impressive growth, with a five-year annualised rate of 52.71%, nearly double the industry’s average of 30.6%, highlighting its operational efficiency and profitability.

Housing and Urban Development Corporation Ltd (HUDCO)

HUDCO is a public sector company that funds and promotes housing and urban infrastructure projects across India. It plays a critical role in supporting government-led initiatives to boost affordable housing and urban development.

The company’s financial prudence is evident in its debt management, with a debt-to-equity ratio of 447.61% over the last five years, well below the industry average of 716.41%. This indicates more disciplined leverage and efficient capital management.

Oil India Ltd

Oil India Ltd is a state-owned oil and gas company engaged in developing and producing crude oil, natural gas, and LPG. It is the second-largest national oil company in India and plays a key role in the country’s energy sector.

Over the last five years, the company’s revenue has grown at an annual rate of 16.37%, more than double the industry average of 7.39%. Its net income has also grown at 14.37% per year, outperforming the industry average of 10.43%, demonstrating its strong profitability and resilience in a volatile market.

Hitachi Energy India Ltd

Hitachi Energy India is one of the prominent mid-cap companies in India in the energy technology sector, providing sustainable energy solutions to various industries. The company focuses on delivering technologies that enable greater efficiency and reliability in energy management.

The company is projected to achieve revenue growth of 26.67% in the next year, a substantial increase over its last three years’ CAGR revenue growth of 10.92%. Over the last five years, its revenue has grown at a yearly rate of 10.18%, far surpassing the industry average of just 0.15%, reflecting its leadership in the energy sector.

Prestige Estates Projects Ltd

Prestige Estates is one of India’s leading real estate developers, with a strong presence across residential, commercial, retail, and hospitality segments. Known for its premium projects, the company has built a solid reputation for quality and innovation in the real estate market.

The company is expected to see an 18.68% growth in revenue next year, a significant improvement compared to the -2.81% CAGR revenue decline over the last three years. Over the past five years, Prestige has seen its revenue grow at a yearly rate of 11.79%, well above the industry average of 3.87%. Its net income has also surged by 27.02% annually, beating the industry average of 14.29%.

Kalyan Jewellers India Ltd

Kalyan Jewellers is one of the largest jewellery retailers in India, with a wide presence across the country and internationally. The company is known for its extensive range of jewellery, from traditional to contemporary designs, catering to a broad customer base.

The company expects revenue growth of 32.17% next year, higher than its last three years’ CAGR revenue growth of 29.28%. Over the past five years, Kalyan Jewellers’ revenue has grown at a yearly rate of 13.67%, outperforming the industry average of 10.28%, reflecting its dominance in the jewellery market.

Dixon Technologies (India) Ltd

Dixon Technologies is one of the largest mid-cap companies in India. They are a leading electronics manufacturing services provider catering to domestic and international markets. The company specialises in manufacturing consumer electronics, lighting, home appliances, and mobile phones, and has emerged as a key player in India’s electronics manufacturing ecosystem.

Dixon is expected to post a remarkable revenue growth of 100.96% next year, significantly exceeding its past three-year CAGR revenue growth of 40.07%. Over the last five years, its revenue has grown at an impressive annual rate of 42.75%, compared to the industry average of 12.01%. Its net income has also grown at a yearly rate of 42.15%, significantly outpacing the industry average of 1.39%.

BSE Ltd

BSE Ltd, formerly known as the Bombay Stock Exchange, is one of the largest and oldest stock exchanges in India. It plays a vital role in the Indian capital markets, facilitating the trading of equities, debt instruments, and other securities.

Over the last five years, BSE Ltd’s revenue has grown at a yearly rate of 23.77%, surpassing the industry average of 16.61%. Its net income has grown at 31.32% per year, well above the industry average of 18.33%, highlighting the company’s strong financial performance and market dominance.

By carefully analysing market trends and the financial performance of the top 10 mid-cap stocks, you can identify those that have the potential to deliver strong returns over the long term.

Investing in Mid-cap Stocks with smallcase

You can also invest in a basket of mid-cap stocks via smallcase. Simply go to smallcase.com or the smallcase app, and log in via your phone number. Then, go to ‘Discover‘ and enter ‘mid-cap‘ in the search bar and hit enter. You’ll find an array of stock portfolios with mid-cap companies in India. Filter the choices based on minimum investment amount, volatility, or the theme of the smallcase. Just pick the one that fits your investment criterion. 

Make sure that you do your diligent research around the top mid-cap shares in India before picking the right stock, keeping in mind your long-term investment goals and risk appetite. 

How to Invest in Mid-cap Stocks?

If you’re looking for the best mid-cap stocks to buy that align with your financial goals, let’s make the process easier for you. Any investment portfolio should have an ideal mix of small-cap, mid-cap, and large-cap stocks, which helps diversify and minimise risk in the long run. One can buy top mid-cap shares in India individually or by buying mutual funds or exchange-traded funds (ETFs) that invest in mid-cap companies. Growth and value investing strategies are often used when investing in NSE mid-cap stocks. 

You can track the best-performing mid-cap companies in India with the help of the Nifty mid-cap index, which captures the movements and forms a benchmark for the mid-cap segment of the market. You can then invest in individual stocks from the Nifty mid-cap 100 index with your Demat account.

Why Should You Invest in Mid-cap Stocks?

• The top mid-cap stocks on the NSE offer the best of large-cap and small-cap stocks as they provide returns with moderated risk. Mid-cap companies in India have a higher chance of expansion and growth than small-cap companies; thus, a higher potential for growth exists.

• There is also a higher return potential as they allow substantial dividends and will allow value appreciation since they are in their growth phase.
• There is more information available to read and analyse about the top mid-cap shares than small-cap shares, so an investor can do a details analysis of the information before making a decision. 

However, there are also risks associated with investing in good mid-cap stocks. They can be more volatile than large-cap stocks and are more likely to be impacted by market downturns. Additionally, mid-cap share prices may have less liquidity, making it harder to sell them quickly.

Factors to Consider Before Investing in Mid-cap Stocks

When looking for the best mid-cap stocks to buy in India, it’s crucial to weigh several key factors to make informed decisions tailored to your financial objectives:

• Risk Tolerance: These stocks often carry higher volatility than large-caps. Assess your risk tolerance to align your investment strategy with your comfort level during market fluctuations.
• Company Stability: Check the financial health and stability of mid-cap companies. Analyse balance sheets, cash flow, and debt levels to gauge the company’s resilience in varying market conditions.
• Market Conditions: Consider the broader economic landscape. Even the top mid-cap stocks may respond differently to economic shifts than large or small-caps. Evaluate current market conditions and potential impacts on mid-cap sectors.
• Growth Potential: Assess the growth prospects of mid-cap companies in India. Research their competitive positioning, industry trends, and growth catalysts to gauge their potential for future expansion.
• Diversification: Maintain a diversified portfolio to mitigate risks associated with individual stocks. Balancing mid-caps with other asset classes can enhance portfolio stability.
• Liquidity: Evaluate the liquidity of the top mid-cap shares in India. Ensure there is ample trading volume to facilitate buying or selling without significant market impact.

Who Should Invest in Mid-cap Stocks?

Investing is often about finding the right match for your financial goals and risk tolerance, and mid-cap stocks on the NSE can be an exciting opportunity for the right investor. But how do you know if these stocks align with your investment strategy? Here are a few things which will help you understand if the top mid-cap stocks are the right choice for you.

Investors Seeking Growth with Moderate Risk

Mid-cap stocks generally have more growth potential than large-caps but with lower risk compared to small-caps. Investors who want to capitalise on a company’s growth trajectory while still managing their risk exposure may find mid-caps an ideal choice. They offer the potential for higher returns than large-cap stocks without the extreme volatility often seen in small-caps.

Long-Term Investors

These stocks are ideal for investors with a long-term investment horizon. While these stocks can be volatile in the short term, they tend to outperform over the long run, as many mid-cap companies have the potential to grow into large-cap giants. Patience can be rewarding as these companies scale up and capture larger market shares.

Portfolio Diversifiers

These stocks are a great option for those looking to diversify their portfolio. The best mid-cap stocks to buy in India offer exposure to companies that are not as mature as large-caps but are more established than small-caps. Including these stocks in a portfolio helps balance risk and provides a good blend of stability and growth potential.

Investors with Moderate Risk Tolerance

Mid-cap stocks are not immune to market volatility, but they generally offer a safer bet than small-cap stocks, which are more vulnerable to market fluctuations. Investors with moderate risk tolerance, who are willing to accept some volatility in exchange for the potential of significant capital appreciation, may find mid-caps appealing.

Features of Mid-cap Stocks

Identifying the best mid-cap shares to buy involves understanding their features, such as moderate market capitalisation, higher growth potential, and greater volatility compared to large-cap stocks. These features can make mid-cap stocks a valuable addition to a diversified investment portfolio.

• Volatility: They are less volatile than small-cap stocks but more volatile than large-cap stocks. Mid-cap companies in India have just entered the growth stage, so their position in the market is considered volatile. 
• Low Liquidity: Mid-cap companies are more liquid than small-cap companies since these companies are well-known and can be trusted,  so it’s easier to find a buyer for these stocks at a fair price. 
• Growth: Mid-cap companies have an abundance of opportunities to grow and turn into large-cap companies with time. They are in their growth stage, so the rate of growth is rapid and is comparable to large-cap stocks. 

Risks of Investing in Mid-cap Stocks

When identifying the best mid-cap stocks to buy in India, it’s essential to be aware of the volatility and market fluctuations these stocks often face.

• Heightened Volatility: Due to their heavy reliance on a single business line and a limited customer base, mid-cap stocks are more susceptible to market fluctuations. When volatility spikes, these stocks can experience abrupt price shocks, directly impacting investor returns.
• Market Options Constraint: The mid-cap stock segment offers a restricted range of opportunities, posing a challenge for investors in selecting suitable stocks. In contrast, both large-cap and small-cap segments present a more diverse array of choices.
• Risks in Market Speculation: Some mid-cap stocks on the NSE may witness significant price surges fueled by market speculation. However, many of these companies may lack the financial resilience to sustain such speculative trends. A thorough analysis of a company’s historical financial strength is imperative for investors to assess its potential for future growth.

Advantages of Investing in Mid-cap Stocks

These are the advantages of investing in the best mid-cap stocks in India. 

• Unlocking Growth Potential: Mid-cap companies in India continue their rapid expansion, potentially gaining broader market recognition and substantial stock price growth.
• Enhanced Diversification: While many investors begin with large-cap or multi-cap stocks, incorporating mid-cap shares into your portfolio offers valuable diversification. This addition can help mitigate overall portfolio volatility.
• Expert-Led Active Management: Experienced share managers specialise in actively overseeing the best mid-cap stocks to buy for long-term financial growth and identifying high-growth potential companies. Fund houses employ dedicated teams for in-depth research, financial analysis, and active monitoring of portfolio company performance.

To Wrap It Up…

Investing in mid-cap stocks on the NSE can be a great way to build a diversified investment portfolio and achieve long-term growth. By focusing on the best mid-cap stocks to buy in India, you can strengthen your portfolio’s performance while mitigating risks associated with market volatility. However, it’s important to understand the risks associated with these stocks and conduct thorough research on mid-cap companies in India before investing.

FAQs

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