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Own midcap stocks? Then don't worry

May 16, 2006 18:47 IST

All the major indices were tumbling in the markets since Monday. The Midcap Index was down over 4% Monday and was seen slipping today as well. So what will be the fate of this momentum driven space? Experts reveal it all.

Most of them see a lot of potential in midcaps now, they feel that midcaps might even outperform the largecaps.

Deven Choksey of KR Choksey Securities:

Look at midcap space by being stock specific I would look at the midcap space in-terms of specific plays. When the market comes down this index will also come down but there will be exceptions, selective plays will do well. One has to be stock specific in midcaps, and look at a company's valuations. Wherever there is a good opportunity, these stocks will attract more funds. So I see this space picking up but I would look at the space by being stock specific.

Choksey's picks:

The stocks, which I am looking at from the midcap space are; Glenmark Pharma. This stock looks good at current levels, and is available at a PE of 14. Another stock that I like is IDBI, it is fundamentally well positioned and there will be good value unlocking in it. The other two stocks that I like are Universal Cables and Mukund Ltd.

Technical analyst, Sachin Chavan: 

The overall good midcap plays will outperform I would not make a categorical statement since the midcap space is not a homogenous one and there is a lot of variety in them. I feel the overall good stocks will outperform. There are select stocks, which have done well, so it is not like this space hasn't moved. I believe there are a lot of good scrips in the FMCG and pharma space.

Midcaps less risky than largecaps I feel that midcaps look less risky than largecaps now, there is more potential in them. Stocks within midcaps which have less volatility and more potential should be invested into right now. Midcaps have more potential because even though other indices have moved up they are at an overbought stage.

Chavan's picks:

I like Jain Irrigation, Finolex Cables and Elder Pharma not because these would be the ultimate winners, but because these stocks provide lower risks and have better potential now.

Sumeet Rohra of Antique Stock Broking:

Midcaps will outperform markets I think midcaps will outperform the broader indices going forward. There are specific midcap stocks which look good and have a high margin of safety, such stocks are good to invest in.

Now is the true test of quality stocks. We see broader outperformance by midcaps but one has to be stock and company specific. There will be a lot of volatility in the F&O segment now. But selling in the midcaps will be absorbed, they will emerge as stronger winners.

Rohra's picks:

Hinduja TMT is an attractive company, here the margin of safety is high. Kernex Microsystems is another pick, this stock has a lot of upside left. The third pick is Prime Property since the company has good profitability. Further, I also like Micro Technologies it will have an EPS of Rs 30.

Hotel Leela also looks good it has an upside till the Rs 650 level. The company is making a Rs 180 crore profit, and will have an EPS of Rs 22-25. So these are my five picks from the midcap space.


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Sakshi Sharma,