INSUBCONTINENT EXCLUSIVE:
India’s largest institutional investor, Life Insurance Corporation of India (LIC), witnessed a quick rebound in its portfolio with the
outperformance of second-rung stocks this month.
As of June 30, the insurance behemoth held nearly 240 companies with market capitalisation
of less than Rs 20,000 crore, in its portfolio
Out of these, 162 managed to deliver positive returns to the insurer, with Texmaco Infrastructure - Holdings rallying 50 per cent to Rs
52.30 month-to-date till September 24.
Texmaco is engaged primarily in the real estate and hydroelectric power generation
businesses.
Sterlite Technologies (up 48 per cent), India Tourism Development Corporation (up 46 per cent), CG Power - Industrial Solutions
(up 41 per cent), Morepan Laboratories (up 39 per cent) and Patel Engineering (up 38 per cent) were among other top gainers on the
list.
Mumbai-based investor Vijay Kedia says midcaps will be the flavour of the market from October onwards
“One should look for opportunities in the midcap space from October onwards,” he said.
Problems at the macroeconomic level, including
job losses and demand issues, have not been solved yet
Many of the midcaps and smallcaps have come into investors’ radar again after the Finance Minister recently slashed corporate tax rate.
On
a month-to-date basis, the BSE Midcap (up 8.61 per cent) and Smallcap (up 9.31 per cent) indices have outpaced the benchmark Sensex (up 5.47
per cent) till September 24.
Among other midcap and smallcap stocks, Shipping Corporation of India, Kirloskar Electric Company, Garden Reach
Shipbuilders and Engineers, Graphite India, Aban Offshore, Bajaj Hindusthan, Orissa Minerals Development Company and Sangam (India) have
risen over 28 per cent so far in September.
Edelweiss Securities said midcap valuations are now at an 18 per cent discount to Nifty, which
lends some comfort from a valuation perspective.
Indo Rama Synthetics, HEG, Manugraph India, Hindustan Motors, Jai Corp and DCM were among
other top 20 gainers in the LIC portfolio, delivering 25-27 per cent returns so far this month.
On the other hand, Hexa Tradex, Assam
Company, Alok Industries, Indian Bank, Ballarpur Industries, Tata Communications and Suzlon Energy have declined 20-46 per cent.
Market
experts say midcaps will lead the rally from here on
And if you are planning to add these stocks to your portfolio, Gautam Duggad, Head of Research for institutional equities at Motilal Oswal
Financial Services, has a piece of advice for you.
“Midcaps may outperform with some earnings coming back over time
However, firms lacking in earnings visibility or showing stress in balance sheets will not participate in the rally,” he told ETNOW during
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