10
Midcaps are trying all they can to get back their mojo on Dalal Street again.
Consider this.
The BSE Midcap index is looking to outpace benchmark Sensex in August for the first time in six months.
It rallied 4.10 per cent on a month-to-date basis till August 28 while the 30-share Sensex jumped 3.40 per cent during the same period.
On the other hand, the BSE Smallcap index advanced 2.80 per cent this month.
Market analysts believe that the momentum is likely to continue.
Sandip Sabharwal of asksandipsabharwal.com in tweet said, “A major shift in action in the markets towards midcaps likely from here till November.
Watch on.”
Girish Nadkarni, MD, Motilal Oswal Investment Banking, believes that the worst is definitely over in mid and smallcap space.
In the midcap space, shares of Aditya Birla Fashion and Retail rallied nearly 47 per cent in August so far.
It was followed by Reliance Communications (up 27.56 per cent), United Breweries (26 per cent), Page Industries (24 per cent), Apollo Hospitals Enterprise (23 per cent), National Aluminium (22 per cent) and IDFC Bank (18 per cent).
On the other hand, Indian Bank, Castrol India, MRF, Oberoi Realty, Mahindra Mahindra Financial Services and Emami slid 6-10 per cent this month.
On a year-to-date basis, the midcap index is down 6.5 per cent while the Sensex rallied nearly 15 per cent till date.
The smallcap index lost over 11 per cent during the same period.
“The volatility should definitely ease over the next six months because there will be clarity.
State elections will be over.
We are almost in September now.
By March next year, we should have got over most of the volatility in the market.
There are people who seek value and can ride out volatility.
Elections are a constant process.
Indian companies have grown throughout this," Nadkarni told ET.
He chose to paint a bright picture.
"The fall that we had seen is now stabilised.
Earnings are coming back.
Things are much brighter.
Maybe, expectations had moved up ahead of earnings, but they are getting tempered now.
Demand for credit is strong.
Monsoon is by and large good this year.
Post-harvest, we expect demand to be strong.”
On investment perspective, Edelweiss Securities is bullish on Amara Raja Batteries with a target price of Rs 981.
Brokerage firm Stewart Mackertich recommended Bharat Forge with a target price of Rs 834.
Petronet LNG (target price Rs 312), Emami (Rs 665), JSPL (Rs 327), Mindtree (Rs 1,225), Teamlease Services (Rs 3,500), MCX (Rs 1,000), RBL Bank (Rs 650) and Tata Chemicals (Rs 957) are among the preferred midcap picks of Motilal Oswal Financial Services.
