Top Performing Midcap Stocks of 2024

Many investors get caught up in the hype of large-cap giants and the potential of small-cap with tiny startups but often overlook the sweet spot: mid-cap stocks.

Midcap stocks often find themselves in the shadows of their larger and smaller counterparts.

Imagine the perfect porridge - not too hot, not too cold, but just the right temperature. That's what mid-caps offer - the ideal balance between stability and growth. While large-caps are household names with limited room for explosive growth, and small-caps are exciting but come with higher risk, mid-caps sit comfortably in the sweet spot.

They haven't reached the size and maturity of large caps, but they're also not as risky as their smaller counterparts. This translates to greater growth potential with lower risk.

In 2024, top midcap stocks have proven their mettle by outperforming benchmark indices.

Reflecting their performance, the BSE Midcap has achieved a notable gain of 6.9%, while the Sensex and Nifty remain relatively stagnant.

In this article, we will look at the top-performing Midcap stocks of 2024 so far.

#1 Oracle Financial Services.

Leading the list is Oracle Financial Services.

OFSS, majority-owned by Oracle, is a world leader in providing IT solutions to the financial services industry.

The company develops, sells and markets computer software, and computer systems and provides consultancy and other information technology (IT) activities.

This midcap stock has risen from around Rs 4,338 apiece levels to Rs 7,815 per share levels, logging around 80% gains in 2024.

This rally in the stock came after the IT company posted robust numbers in its latest quarterly earnings.

OFSS reported a 69.4% year-on-year (YoY) jump in net profit at Rs 7.4 billion (bn) for the third quarter that ended 31 December 2023.

Revenue from operations spiked 26% to Rs 18.2 bn as against Rs 14.5 bn reported in the corresponding period last year, as license fee signings aided the margins during the quarter.

During the quarter, its operating margin came in at 46.1%, while net profit margins came at 40.6%.

Further, the sentiment around IT stocks has turned positive ever since IT majors TCS, Wipro, and Infosys posted earnings for the third quarter.

For Oracle Financial, the growth in the fintech space will keep the company in focus.

Going forward, the adoption of AI in financial services and fintech companies is expected to grow at a CAGR of 23.37% in the next two years, which is a huge prospect for Oracle Financial as a leader in the AI space.

#2 Indian Railway Finance Corporation

Second on the list is the Indian Railway Finance Corporation (IRFC).

The company is engaged in borrowing funds from the financial markets to finance the acquisition/creation of assets, which are then leased out to the Indian Railways or any entity under the Ministry of Railways.

In 2024, so far, the stock has risen around 54% from Rs 100 to Rs 154.

This can be attributed to IRFC's fundraising plan.

IRFC is planning to raise to Rs 35 billion (bn). It will raise to Rs 30 bn, which includes Rs 25 bn in greenshoe.

The bonds have a maturity of 10 years.

The Indian government owns an 86.36% stake in IRFC. It is much higher than the minimum public shareholding norms.

So, the company is looking at fundraising options and diluting some stakes along the way.

Apart from this, IRFC shares are rallying owing to robust growth prospects.

The government recently announced a massive investment of around Rs 7 trillion to develop rail infrastructure. This move will primarily benefit railway PSUs like IRFC.

IRFC's principal business is to borrow funds from the financial markets to finance the acquisition/creation of assets, which are then leased out to the Indian Railways.

This massive capital-intensive project by the government will create a substantial funding requirement for the Indian Railways.

IRFC, established as its dedicated financing arm, is perfectly positioned to benefit.

For more details, see the IRFC company fact sheet and quarterly results.

#3 Indian Overseas Bank

Third on the list is the Indian Overseas Bank (IOB).

Indian Overseas Bank (IOB) is one of the oldest and major public-sector Indian banks.

It is an Indian public sector bank. It has about 3,220 domestic branches, 2 DBUs (Digital Banking Units) about four foreign branches and a representative office.

This midcap stock has risen from around Rs 44 apiece to Rs 67 per share levels, logging around 54% gains in 2024 so far.

Shares of Indian Overseas Bank (IOB) jumped after the bank announced its results for the December 2023 quarter.

The bank reported a 24% YoY rise in total income at Rs 74.4 bn against Rs 60.1 (billion) bn in the year-ago period.

It also reported a 30% YoY rise in net profit at Rs 7.2 bn against Rs 5.5 bn in the same period in FY23. The state-run lender attributed the growth to a rise in income and improved asset quality.

Interest income for the quarter rose to Rs 61.8 bn, a notable increase from Rs 50.6 bn in the same period in 2022. The net interest margin came in at 3.1%, compared to 3.3% in the December 2022 quarter.

Apart from this, Indian Overseas Bank (IOB) has decided to sell loans in the SME segment comprising 41 accounts worth Rs 2.1 bn.

The bank is looking to recover 60% of the debt. It has invited potential buyers to submit offers, with 20% in cash and 80% in security receipts (SR).

This upfront cash payment contributes to the recovery of the outstanding debt, providing the bank with immediate funds.

Looking into the future, Indian Overseas Bank (IOB) envisions a continual reduction in net Non-Performing Assets (NPA), demonstrating a firm commitment to managing slippages and upholding stringent control over asset quality. The bank is optimistic about the forthcoming financial year, projecting a credit growth of 13-14%.

#4 UCO Bank

Fourth on the list is UCO Bank.

UCO Bank is a commercial bank and a government of India undertaking.

It offers value-added banking solutions, including international banking services, services for NRIs loan schemes, deposit schemes, and value-added e-banking solutions.

So far in 2024, shares of the company have rallied 47% from Rs 40 to Rs 59.

This impressive upturn was due to the statements made by UCO Bank's Managing Director and CEO, Ashwani Kumar, during an earnings call. Kumar revealed that as of 2 February 2024, the bank has allocated Rs 7 bn for the renewable sector and is on the verge of launching a new product specifically designed for rooftop solar.

The positive momentum in the company's shares is due to the Reserve Bank of India's monetary policy announcement on 8 February. During this announcement, the RBI maintained the status quo for the sixth consecutive time.

Looking ahead, the company is poised to benefit from the incorporation of pre-sanctioned credit lines, enhancing the versatility and widespread adoption of the Unified Payments Interface (UPI).

As the nation continues to forge partnerships with other countries, UPI is projected to necessitate diverse payment mechanisms in addition to its existing solutions. Banks are steadfastly committed to delivering these services in the future.

This strategic positioning is expected to bode well for UCO Bank in the coming times.

For more details, see the UCO Bank fact sheet and quarterly results.

#5 HPCL

Last on the list is HPCL.

HPCL is a Maharatna company involved in refining crude oil and marketing of various petroleum products. This extensive range includes diesel, kerosene, liquefied petroleum gas (LPG), lube oils, petrol, aviation turbine fuel (ATF), and many more.

So far in 2024, shares of the company have rallied 36% from Rs 399 to Rs 542.

This was due to the company's plan to deploy EV charging stations.

Ultraviolette has signed an MoU with HPCL to install electric vehicle charging stations at key HPCL fuel stations across India.

The MoU was signed at the Bharat Mobility Global Expo 2024.

Under the first phase of the partnership, Ultraviolette will set up charging

stations at HPCL retail fuel pumps in 12 select states, followed by expansion across the country.

The company has also announced its plans to start commercial production of fuels at the country's newest refinery in Rajasthan's Barmer by January 2025.

The refinery-cum-petrochemicals complex, being built at a cost of nearly Rs 730 bn, will have a crude processing capacity of 9 million tonnes per annum (mtpa) and is expected to cater to the rapidly rising fuel demand in the northern parts of the country.

Going forward, the company has big plans towards the EV charging space.

It plans to increase its refining capacity to 45.3 MMT by financial year 2028.

The company is also investing in expanding its pipeline network and enhancing its presence in petrochemicals, LNG, logistics, EV charging stations, retail chains, hydrogen, and fuel cells.

For more details, see the HPCL fact sheet and quarterly results.

Which Other Midcap Stocks have Rallied the Most in 2024?

Apart from the stocks above, here are some other best performing midcap stocks of 2024 so far

Company	Current Price (Rs)	Gains in 2024 (%)
NHPC	88.55	34%
Oil India	498.95	32%
Cummins India	2566.75	31%
Trent	3934.65	31%
SJVN	120.6	30%
Abbott India	29299.8	29%
IDBI Bank	86.45	28%
Canara Bank	566.1	28%
Max Healthcare Institute	879.35	28%
Yes Bank	28.7	27%
Indian Bank	525.95	25%
Lupin	1609.6	23%
General Insurance Corporation of India	379.55	22%
The Indian Hotels Company	527.85	21%

Data Source: Equitymaster

Conclusion

Investing in top-performing midcap stocks offers several advantages. Firstly, midcaps often exhibit higher growth potential compared to large caps, as they are in a phase of expansion and can capitalize on emerging opportunities.

Their agility and adaptability, stemming from their smaller size, enable quicker responses to market changes and innovative strategies.

The inclusion of midcaps in a diversified portfolio enhances diversification benefits by adding exposure to companies with different risk profiles. Moreover, midcaps may attract interest as potential targets for mergers and acquisitions, potentially benefiting investors through acquisition premiums.

However, it's essential to acknowledge the downsides. Midcap stocks come with higher inherent risk and greater volatility than large-caps, making them more susceptible to market fluctuations and economic challenges.

Liquidity can be an issue, with lower trading volumes resulting in less liquidity and wider spreads.

Thus, investing in midcap stocks should be approached with caution, considering your risk tolerance and long-term investment goals.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...