Fundamentally Strong Mid-Cap Stocks

The table below showcases some of the top-performing mid-cap stocks based on their market capitalisation and impressive 1-year returns. Leading the list is Sarda Energy & Minerals Ltd with a 1-year return of 81.42%, followed by Genus Power Infrastructures Ltd at 94.02%, indicating strong growth in these mid-cap stocks over the past year.

Introduction To Mid-Cap Stocks With Strong Fundamentals

HBL Engineering Ltd

HBL Power Systems Limited is an India-based company involved in the design, development, and production of specialized batteries and electronic solutions. The company also provides services related to its products. Its business segments include Industrial batteries, Defence and Aviation batteries, and Electronics. 

The company operates across three primary verticals: battery, electronics, and defence, with the electronics vertical further divided into railway electronics and electric mobility. Notable products in this vertical include the train collision avoidance system (TCAS) and the train management system (TMS), which focus on safety and efficient track utilization.  

• Close Price ( ₹ ): 626.35
• Market Cap ( Cr ): 17362.11
• 1Y Return %: 55.69
• 6M Return %: 24.35
• 1M Return %: 9.40
• 5Y CAGR %: 109.55
• % Away From 52W High: 15.59
• 5Y Avg Net Profit Margin %: 6.14 

Sarda Energy & Minerals Ltd

Sarda Energy & Minerals Limited is an Indian company operating in the metal, mining, and power sectors. The company is divided into segments such as Steel, Ferro, and Power, offering a range of products including sponge iron, billets, ferroalloys, wire rods, HB wires, iron ore, thermal power, hydropower, and pellets. 

Sponge iron is produced for internal use in creating steel ingots and billets using an induction furnace route. The company also manufactures and exports manganese-based ferroalloys to approximately 60 countries, which are essential in the production of mild steel and special steel.  

• Close Price ( ₹ ): 457.35
• Market Cap ( Cr ): 16269.44
• 1Y Return %: 81.42
• 6M Return %: 99.54
• 1M Return %: 1.44
• 5Y CAGR %: 91.26
• % Away From 52W High: 14.79
• 5Y Avg Net Profit Margin %: 13.94 

Action Construction Equipment Ltd

Action Construction Equipment Limited specializes in the manufacturing of various construction equipment, including hydraulic mobile cranes, tower cranes, crawler cranes, truck-mounted cranes, forklifts, backhoe loaders, compactors, motor graders, tractors, harvesters, and rotavators. The company operates through four key segments: cranes, construction equipment, material handling, and agriculture equipment. 

Headquartered in Haryana, the company’s equipment finds applications in diverse sectors such as infrastructure construction, power projects, ports, shipyards, dams, metro rail, roads, mining, steel industry, engineering industry, railways, cement, petroleum, defence, chemicals, fertilizer plants, warehousing, logistics, and building construction.

• Close Price ( ₹ ): 1357.70
• Market Cap ( Cr ): 16157.9
• 1Y Return %: 65.59
• 6M Return %: -6.37
• 1M Return %: 1.83
• 5Y CAGR %: 79.06
• % Away From 52W High: 24.84
• 5Y Avg Net Profit Margin %: 7.22 

Genus Power Infrastructures Ltd

Genus Power Infrastructures Limited is an India-based company specializing in manufacturing and providing metering solutions, as well as undertaking engineering, construction, and contracts on a turnkey basis. 

The company has two main segments: Metering business and Strategic investment activity. Within its metering solutions, the company offers a variety of electricity meters including single-phase, three-phase, CT-operated, ABT and grid meters, DT meters, prepayment meters, smart meters, net meters, AMI, and MDAS.  

• Close Price ( ₹ ): 458.95
• Market Cap ( Cr ): 13945.48
• 1Y Return %: 94.02
• 6M Return %: 50.77
• 1M Return %: 10.49
• 5Y CAGR %: 79.11
• % Away From 52W High: 5.90
• 5Y Avg Net Profit Margin %: 7.05 

Lloyds Engineering Works Ltd

Lloyds Engineering Works Ltd, formerly known as Lloyds Steels Industries Limited, is an Indian company that designs and manufactures heavy equipment, machinery, and systems for various sectors, including hydrocarbons, oil and gas, steel plants, power plants, and nuclear plant boilers. The company operates within the Engineering Products and Services segment. 

Its activities encompass the design, engineering, manufacturing, fabrication, supply, erection, and commissioning of a wide range of equipment for mechanical, hydraulic, structural, process, metallurgical, and chemical plants. This includes marine loading/unloading arms, truck/wagon loading/unloading arms, columns, pressure vessels, dryers, boilers, power plant and steel plant equipment, and other capital equipment. 

• Close Price ( ₹ ): 78.68
• Market Cap ( Cr ): 9143.06
• 1Y Return %: 71.48
• 6M Return %: 21.05
• 1M Return %: 5.76
• 5Y CAGR %: 177.17
• % Away From 52W High: 18.71
• 5Y Avg Net Profit Margin %: 7.36 

Man Infraconstruction Ltd

Man Infraconstruction Limited is an Indian company that specializes in integrated engineering, procurement, and construction services. The company is involved in civil construction, project management, and real estate development, particularly focusing on building roads through a design-build-finance-operate-transfer (DBFOT) model.

It operates within two main segments: EPC and Real Estate. With expertise in various infrastructure sectors such as port development, residential and commercial construction, industrial projects, road infrastructure and residential and commercial building construction, including high-rise buildings,  and office complexes.

• Close Price ( ₹ ): 235.86
• Market Cap ( Cr ): 8778.43
• 1Y Return %: 17.67
• 6M Return %: 21.30
• 1M Return %: 20.13
• 5Y CAGR %: 74.09
• % Away From 52W High: 5.70
• 5Y Avg Net Profit Margin %: 11.67 

Tilaknagar Industries Ltd

Tilaknagar Industries Ltd. is a company in the alcoholic beverage industry. Its main focus is on producing and selling Indian Made Foreign Liquor (IMFL) and extra-neutral alcohol. The company offers a range of liquor brands across different categories like brandy, whisky, vodka, gin, and rum. 

Some of its popular brands include Mansion House Brandy, Courrier Napoleon Brandy-Green, Courrier Napoleon Brandy-Red, Vodka, Mansion House Whiskey, Senate Royale Whiskey, Madira Rum, and Blue Lagoon Gin.  Additionally, it exports its products to regions in East and Southeast Asia, Africa, the Middle East, and Europe.

• Close Price ( ₹ ): 409.20
• Market Cap ( Cr ): 7812.8
• 1Y Return %: 52.18
• 6M Return %: 73.57
• 1M Return %: 38.48
• 5Y CAGR %: 86.47
• % Away From 52W High: 4.81
• 5Y Avg Net Profit Margin %: 8.85  

AGI Greenpac Ltd

AGI Greenpac Limited is a packaging products company based in India. The company operates through three main business segments: the Packaging Product Division, Investment Property, and Others. The Packaging Product Division focuses on manufacturing and marketing a wide range of packaging products, including containers, speciality glass, PET bottles, and security caps and closures. 

The Investment Property segment includes land and buildings owned by the company that are leased out. The Others segment comprises activities such as wind power generation. AGI Greenpac manufactures glass containers and speciality glass under the AGI Glaspac brand, PET bottles and products under the AGI Plastek brand, and security caps and closures under the AGI Closures brand.  

• Close Price ( ₹ ): 1063.15
• Market Cap ( Cr ): 6878.3
• 1Y Return %: 12.67
• 6M Return %: 60.04
• 1M Return %: 10.10
• 5Y CAGR %: 86.95
• % Away From 52W High: 3.80
• 5Y Avg Net Profit Margin %: 8.66 

TD Power Systems Ltd

TD Power Systems Limited, an India-based company, specializes in manufacturing customized air-conditioning (AC) generators and electric motors to meet the specific needs and specifications of its customers. The company’s product range includes generators, motors, replacement parts, refurbishments, and spares. 

They provide various types of generators such as Steam Turbine Generators, Gas Turbine Generators, Hydro Turbine Generators, Wind Turbine Generators, Gas Engine Generators, Diesel Engine Generators, Marine Application Generators, Testing Application Generators, and Geothermal Application Generators.  

• Close Price ( ₹ ): 439.35
• Market Cap ( Cr ): 6833.03
• 1Y Return %: 58.32
• 6M Return %: 28.63
• 1M Return %: 6.72
• 5Y CAGR %: 74.63
• % Away From 52W High: 9.14
• 5Y Avg Net Profit Margin %: 8.80 

Aditya Vision Ltd

Aditya Vision Limited is an Indian company that operates a chain of retail stores specializing in various consumer electronics. The company’s main focus is on selling a wide range of electronic products such as consumer electronics, home appliances, mobility devices, and IT products. 

With a product catalogue of over 10,000 items, including digital gadgets like mobile phones, laptops, and tablets, as well as entertainment solutions like televisions, soundbars, and cameras, Aditya Vision Limited offers a diverse selection from both national and international brands.   

• Close Price ( ₹ ): 475.55
• Market Cap ( Cr ): 6117.28
• 1Y Return %: 41.45
• 6M Return %: 51.58
• 1M Return %: 2.03
• 5Y CAGR %: 184.09
• % Away From 52W High: 20.90
• 5Y Avg Net Profit Margin %: 3.52 

What are Fundamentally Strong Mid-Cap Stocks?

Fundamentally strong mid-cap stocks are companies with solid financial health, consistent revenue growth, and a proven track record of profitability. These stocks typically have a stable management team, strong market position, and good potential for expansion. Investors seek them for their growth potential while ensuring the company is well-managed and financially sound, even during economic downturns.

Features Of Fundamentally Strong Midcap Stocks In India

The key features of fundamentally strong mid-cap stocks in India include solid financial performance, strong growth prospects, and a robust market presence. These companies typically demonstrate the potential for significant growth, while maintaining stability in their operations and financials.

1. Consistent Revenue Growth: Fundamentally strong mid-cap stocks exhibit consistent and steady revenue growth over the years. This shows that the company can adapt to market changes and steadily increase its earnings, ensuring long-term growth and resilience in the market.
2. Strong Profitability and Margins: These stocks maintain high profitability and healthy profit margins, indicating efficient management and a solid business model. A strong bottom line allows mid-cap companies to reinvest in growth opportunities and weather economic downturns effectively.
3. Scalable Business Model: A scalable business model is crucial for mid-cap stocks. These companies must have the capacity to expand quickly without compromising on quality or operational efficiency, enabling them to tap into larger markets and diversify their product offerings.
4. Solid Management and Leadership: Strong management is a defining characteristic of successful mid-cap stocks. Experienced leadership that makes strategic decisions, invests in innovation and navigates challenges effectively contributes to the company’s long-term growth and stability in the competitive market.
5. Market Position and Competitive Edge: These companies have a strong position in their industry, with a competitive edge that helps them outperform rivals. This could be through unique products, technological innovation, or dominant market share, allowing them to maintain a strong foothold in the market.

List of Fundamentally Strong Mid Cap Stocks Based on 6-Month Return

The table below shows the list of fundamentally strong mid-cap stocks based on a 6-month return.

Best Fundamentally Strong Midcap Stocks 2024 Based on 5-Year Net Profit Margin

The table below shows the best fundamentally strong midcap stocks in 2024 based on 5-year net profit margin.

Fundamentally Strong Mid Cap Stocks NSE Based on 1M Return

The table below shows the fundamentally strong mid-cap stocks nse based on 1-month return.

High Dividend Yield Fundamentally Strong Mid-Cap Stocks

The table below shows the high dividend yield of fundamentally strong mid-cap stocks based on dividend yield.

Historical Performance of Fundamentally Strong Mid-Cap Stocks

The historical performance of fundamentally strong mid-cap stocks based on 5-year CAGR.

Factors To Consider When Investing In Fundamentally Strong Mid-Cap Stocks

The factors to consider when investing in fundamentally strong mid-cap stocks include evaluating the company’s financial health, growth potential, and market position. 

1. Financial Health and Profitability: Assess the company’s balance sheet, cash flow, and profitability ratios. A company with a solid financial foundation and consistent profit margins demonstrates its ability to generate sustainable earnings and weather economic downturns, making it a safe long-term investment.
2. Management and Leadership Quality: Effective leadership is crucial for the success of mid-cap stocks. Evaluate the management’s track record, their strategic vision, and their ability to navigate challenges. Strong leaders can drive innovation and ensure the company’s long-term growth.
3. Growth Potential and Scalability: Look for companies with significant growth potential, whether through expanding into new markets, developing innovative products, or capitalizing on emerging industry trends. Scalability is key, as companies should be able to grow without compromising operational efficiency.
4. Industry and Market Trends: Consider the industry in which the company operates. A strong market position within a growing industry, such as technology or renewable energy, offers greater upside potential. Ensure the company is positioned well to capitalize on favourable industry trends.

How To Invest In Fundamentally Strong Mid-Cap Stocks?

To invest in fundamentally strong mid-cap stocks, start by conducting thorough research on companies with solid financials, growth potential, and a strong market position. 

1. Conduct In-Depth Research: Evaluate a company’s financial health, revenue growth, profitability, and management. Look for mid-cap stocks with consistent earnings, strong cash flow, and a clear growth strategy. This research will help you identify companies with long-term growth potential.
2. Choose a Reliable Broker: Select a reputable stock broker like Alice Blue, which offers a user-friendly platform and tools for research and trading. Alice Blue provides competitive fees and access to real-time data, helping you make informed decisions while managing your portfolio.
3. Diversify Your Portfolio: Investing in a mix of mid-cap stocks across various sectors helps reduce risk and enhances the overall return potential. Diversification allows you to balance the risks associated with individual stocks while benefiting from sector-specific growth.
4. Monitor Regularly and Reassess: Once invested, regularly monitor your portfolio’s performance. Track key financial metrics, industry developments, and market trends that could affect your stocks. Periodic reassessment ensures you stay aligned with your investment goals and adjust your strategy as needed.
5. Invest with a Long-Term Horizon: Mid-cap stocks can be volatile in the short term, but their growth potential is significant over the long term. Patience and discipline are key to benefiting from the growth of fundamentally strong mid-cap companies.

Impact of Government Policies on Fundamentally Strong Mid-Cap Stocks

Government policies, including fiscal measures, regulatory changes, and economic incentives, can significantly influence fundamentally robust mid-cap stocks. These policies often shape businesses’ operating environments. Positive government interventions can enhance growth prospects for mid-cap companies, while adverse regulations may pose challenges.  

Furthermore, mid-cap stocks can react differently to policy shifts compared to large-cap or small-cap stocks. Investors should closely monitor government decisions, as they can lead to opportunities or risks that affect the performance of these fundamentally strong companies in the market.

How Fundamentally Strong Mid-Cap Stocks Perform In Economic Downturns?

Generally, these stocks tend to exhibit resilience compared to their larger counterparts. Their stability often stems from solid fundamentals such as robust balance sheets, consistent earnings growth, and effective management teams.   

During challenging economic times, mid-cap stocks may benefit from their agility and adaptability, allowing them to respond more effectively to changing market conditions. While volatility can increase, those that are well-positioned often emerge stronger, taking advantage of opportunities that arise in the aftermath of economic slowdowns.

Advantages Of Investing In Fundamentally Strong Mid-Cap Stocks

The primary advantage of investing in fundamentally strong mid-cap stocks is the balance they offer between growth potential and risk. These companies have solid financial foundations, providing substantial upside while offering less volatility than small-cap stocks.

1. High Growth Potential: Fundamentally strong mid-cap stocks offer significant growth potential as they are typically in their expansion phase. With a proven business model and solid financials, these companies can experience rapid growth, providing attractive returns over time compared to large-cap stocks.
2. Lower Volatility than Small-Cap Stocks: Compared to smaller, riskier stocks, mid-cap companies tend to be less volatile but still offer the chance for higher returns than large-cap stocks. This makes them an appealing option for investors seeking growth without taking on excessive risk.
3. Diversification Benefits: Investing in mid-cap stocks helps diversify your portfolio by adding companies with solid growth potential in different sectors. Diversifying with fundamentally strong mid-cap stocks reduces risk while benefiting from market growth across various industries.
4. Access to Emerging Markets: Mid-cap companies often operate in emerging sectors or markets, giving investors access to high-growth industries like technology, renewable energy, and healthcare. These sectors can provide above-average returns as they expand and gain market share.
5. Attractive Valuation: Fundamentally strong mid-cap stocks are often priced attractively compared to large-cap stocks. This provides an opportunity to invest in growing companies at a reasonable valuation, offering a favourable risk-to-reward ratio for long-term investors.

Risks Of Investing In The Fundamentally Strong Mid-Cap Stocks

The main risk of investing in fundamentally strong mid-cap stocks lies in their volatility and susceptibility to market fluctuations. While these stocks have solid growth potential, they are still more vulnerable to economic downturns compared to large-cap stocks.

1. Higher Volatility: Mid-cap stocks are generally more volatile than large-cap stocks, meaning they can experience sharper price swings. This volatility increases the risk of short-term losses, especially in uncertain market conditions or during economic slowdowns.
2. Liquidity Issues: Mid-cap stocks tend to have lower trading volumes than large-cap stocks, which can result in liquidity issues. This makes it harder to buy or sell shares without affecting the stock price, particularly during times of market turbulence.
3. Economic Sensitivity: While fundamentally strong, mid-cap stocks are still more susceptible to macroeconomic factors, such as recessions or inflation. A downturn in the economy or changes in interest rates can significantly impact their performance, affecting profitability and stock value.
4. Competition and Market Position: Mid-cap companies may face fierce competition from both smaller and larger rivals, which could affect their growth prospects. If a company cannot maintain its competitive edge, its performance could suffer, leading to a decline in stock value.
5. Execution Risks: Despite having solid fundamentals, mid-cap companies may struggle to execute their growth strategies effectively. Challenges such as management missteps, operational inefficiencies, or failure to scale could derail their growth trajectory, affecting long-term returns for investors.

Mid Cap Stocks GDP Contribution

Mid-cap stocks contribute significantly to a country’s GDP by driving economic growth through innovation, job creation, and industry expansion. These companies often operate in emerging sectors such as technology, infrastructure, and renewable energy, fueling productivity and regional development. 

As they grow, mid-cap firms create employment opportunities and increase consumer spending, boosting domestic demand. Additionally, their expansion into new markets and industries strengthens the economy’s overall competitiveness. While smaller than large-cap companies, mid-cap stocks have the potential for substantial GDP contribution due to their ability to scale quickly and effectively tap into evolving market needs.

Who Should Invest In Fundamentally Strong Mid-Cap Stocks?

Fundamentally strong mid-cap stocks are ideal for investors seeking a balance between risk and growth potential. These stocks offer higher growth than large-cap stocks while being less volatile than small-cap stocks, making them suitable for a variety of investors.

1. Long-Term Investors: Investors with a long-term horizon will benefit from fundamentally strong mid-cap stocks. These companies, in their growth phase, often provide higher returns over time, rewarding patience as they expand and establish a stronger market presence.
2. Growth-Oriented Investors: Investors focused on capital appreciation rather than income generation should consider mid-cap stocks. These stocks typically reinvest profits for expansion, making them an attractive choice for those seeking long-term growth rather than immediate dividends.
3. Risk-Tolerant Investors: Mid-cap stocks can be more volatile than large-cap stocks, so they are suitable for investors who can handle short-term fluctuations. Those with a higher risk tolerance can benefit from the potential for substantial returns over time.
4. Diversification Seekers: Investors looking to diversify their portfolios should consider mid-cap stocks. Adding these companies to a portfolio of established large-cap stocks provides exposure to growing sectors, thus balancing risk and enhancing the potential for higher overall returns.

Mid-Cap Stocks With Strong Fundamentals – FAQs

We hope you’re clear on the topic, but there’s more to explore in stocks, commodities, mutual funds, and related areas. Here are important topics to learn about.

Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.