3 Nifty Midcap 100 stocks you should invest to get 20% return

Nifty Midcap 100 stocks to invest
Nifty Midcap 100 stocks to invest

How the Nifty Midcap100 index performed in 2018



Nifty midcap 100 index has made an all-time high of 21840.85 in 18th Jan 2018, which is almost 18 months back. Since then the midcap index was under pressure and was really tough to invest in till Nov 2018. The midcap index has made all time low of 15802.95 in 9th Oct 2018. There were many reasons behind this fall of midcap category like sharp rise in Crude oil price, PNB scam, IL&FS issue, political uncertainty, global issues like economic slowdown, Trade War, etc. The above issues have not only dragged down the midcap stocks but also small-cap stocks drastically.


In the last 18 months journey, data shows that Nifty rose by 14% and Sensex gained 16% during that period. But the Nifty midcap 100 index for the same period has come down to almost 14%. The valuations of midcap stocks, which had a premium over large caps until Jan 2018, cooled off significantly due to a sharp correction in 2018. NSE midcap 100 index is currently trading almost lower than its three years average.


Reasons why Nifty Midcap 100 will perform now

Midcap stocks are at very attractive valuations at present. The issues due to which we have seen sharp correction last year in 2018 has almost resolved. The recent fresh mandate of NDA government and its reforms will also encourage FIIs and DIIs to invest in Indian Equity market.




The lower GDP numbers and controlled inflation can welcome interest rate cut in the current financial year in RBI policy. This will enhance liquidity in the market which will help midcap and smallcap to outperform at least for three years.



It is also expected that the 100 days big-bang economic reforms of Modi Government's second terms will attract more FIIs to invest in India. Reforms will create a huge opportunity in the midcap stocks for investment. Economic reforms, interest cut, and liquidity can revive the midcap size of companies in FY19-20. This will create tremendous opportunity for investors to invest in midcap size stocks in the coming days.


We have mentioned below 3 Top Picks in Nifty midcap 100 stock you can invest for medium term to long term to earn around 20% return.



Federal Bank- The first Nifty midcap 100 stock for investment is Federal Bank. Federal Bank is a leading Private Sector Bank won 1st position in best technology bank award 2019. The bank has 1251 branches and 1669 ATMs spread across the country as on 31st March 2019. The bank does not have direct exposure in stresses companies like Rcom, Essel group, Jet Airways or Reliance Infra except a small exposure into Rcap and Reliance Home Finance. The net NPA of the Bank as on 31st March 2019 stood at Rs 1626 Cr and this as a percentage to Net Advances is 1.48%.


For 2018-19 FY, Federal Bank reported highest ever standalone net profit of Rs 1243.89 crore, up 41.5 percent from 878.85 crores in the last financial year 2017-18. The interest Income increases of 17.08% YoY at Rs 11419 Cr Vs 9752.86 Cr. The lower provisioning and increase in Interest Income jumps its net profit in 2018-19 FY. The total business of the bank grew by 20.28 percent YoY from Rs 2,05165 Cr as on 31st March 2018 to Rs 2,46,783.61 Cr as on 31st March 2019. At the current market price of Rs 107.80, the valuation is very attractive and we recommend to invest in this stock near 100 for medium term to long term for the target of Rs 126-132




Jubilant Foodworks- The second Nifty midcap 100 stock is Jubilant Foodworks. The Company JFL is a Jubilant Bhartia Group Company is a food service company. The company has the exclusive rights to develop and operate Domino’s Pizza brand in India Nepal, Bangladesh, and Sri Lanka. It is a market leader in the Pizza segment with a network of 1,167 Domino’s Pizza restaurants across 269 cities in India. The company has 32 Dunkin’ Donuts restaurants across 10 cities in India as on September 30,2018


Growth and Profitability are seen in the last financial year in Jubilant Foodworks audited Financial reports. The company has reported 56.4 percent growth in net profit at Rs 322.80 crores as compared to Rs 206.40 crore in the last financial year. Company’s operating profit (EBITDA) climbed 36.2% YoY at Rs 607.80 crore, while operating margin stood at 17.2%, up by 220 bps.


The company has also entered into the Chinese Fast Casual segment and the Bangladesh market. Domino’s Pizza opened 30 new stores in India and also opened its first restaurant in Dhaka, Bangladesh in March quarter. The store got off to a strong start and broke the global Domino’s record for the highest number of orders. New product launches in the core Pizza segment, the launch of combo offers, focus on increasing railway deliveries, Cricket World Cup 2019 are expected to boost the company’s profit in 2019-20 FY.


We believe that the recent correction in this counter is a good opportunity to invest in the stock. The Current Market Price of Rs 1357 looks attractive, you can accumulate near Rs 1320 for medium term to long term for the target of Rs 1580- 1605



Crompton Greaves Consumer Electrical Ltd- Crompton Greaves is the third Nifty midcap 100 stock for investment. It’s a leading player in India’s consumer electricals sector with a wide product. Its product ranging from fans, lamps, and luminaries to pumps and household appliances such as water heater, mixer grinders, toasters, irons, and electric lanterns and switches. The company is market leaders in Fans and residential pumps and has leading positions in other household electrical items. The Company has a nationwide network with more than 3000 distributors and over 1 lakh retailers and a strong after sales support of over 500 service centers.


For the financial year ended 2018-19, the net profit of Crompton Greaves rose 23.97% to Rs 401.39 crore against Rs 323.79 crore during the previous year 2017-18. Sales of the company rose 9.79% to Rs 4478.91 crore in the year ended March 2019 as against Rs 4079.66 during the previous year ended March 2017-18


Company’s LED business was the key revenue driver in the lighting and fixtures business which contributes around 85 % to the segment’s top line. Management is now going to focus B2B segment to increase the sales, already invested in recruiting sales people and technology to drive sales. The company also aims to drive profitability through new innovative products like antibacterial bulbs.


The consumer durable market is set to get a major push from the government. The government mandate of rural electrification and facilities given to farmer can definitely increase the demand of LEDs, bulbs, pumps and other electrical items from multiple corners.


The Current Market Price of Rs 248 looks attractive, you can invest in the stock near Rs 240 for medium term to long term for the target of Rs 284-292


Conclusion:



All the above three Nifty midcap 100 stocks are at an attractive valuation, you can invest for mid-term or long term perspective to get around 20% return. If we need to recommend anyone out these three stocks we would recommend Federal Bank first. You can start investing from the current level and accumulate more when there is a dip. Please don’t invest your all your money at one time, always invest partwise.




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Happy Investing!


Finogyan Team


Disclaimer-Finogyan has taken due care and caution in compilation of data for its blog. The views and investment tips expressed by investment experts on Finogyan are their own and not that of the website or its management. Finogyan is not SEBI registered Advisors and advises users to check with certified and SEBI registered experts before taking any investment decision. However, Finogyan does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Finogyan especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.

3 Nifty Midcap 100 stocks you should invest to get 20% return 3 Nifty Midcap 100 stocks you should invest to get 20% return Reviewed by Finogyan on June 05, 2019 Rating: 5

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