Which are the top midcap growth stocks in India right now?
As per Equitymaster's Stock Screener, these are the top midcap growth stocks in India right now -
- #1 SONA BLW PRECISION FORGINGS
- #2 GLAND PHARMA
- #3 GUJARAT GAS
- #4 ICICI SECURITIES
- #5 AU SMALL FINANCE BANK
These companies have been ranked as per their 3-year sales CAGR (compounded annual growth rate).
High growth companies have the potential to generate multibagger returns. But if these companies disappoint even slightly, they could get punished heavily by the market due to high valuations.
However, there are other parameters you should take into account as well before forming a hard opinion on the stock.
What are midcap stocks?
As per the market regulator, companies that rank from 101 to 250 in terms of market capitalisation are known as midcap companies.
Investing in midcap stocks may offer investors the best of both worlds. They're big enough to be considered institutional investments, but small enough that you don't need a lot of money to own them.
What are growth stocks?
Growth stocks are companies whose sales and profits are growing at a faster pace than the market.
The top growth stocks usually trade at a premium to other stocks in the market because investors are willing to pay for the higher profits in the years ahead.
The faster they grow, the bigger the returns are for shareholders.
What are the benefits of investing in midcap growth stocks?
Midcap stocks carry a higher potential for growth as compared to large caps. They can be a great way to access niche business models.
Many midcaps used to be smallcaps at one point in time but have grown steadily over the years on the back of good financials and growth.
How much should one invest in midcap stocks?
According to us, in a scenario of ideal allocation of funds, mid cap stocks should not comprise more than 30% of one's total equity portfolio.
Further, we believe that a single mid cap stock should ideally not form more than 5-6% of the total portfolio.
Please note that this allocation will vary from person to person. For something that works best for you, we recommend you talk to your investment advisor.