Mid-cap stocks are known for being relatively risky as compared to large-cap companies but providing higher returns than them. According to AMFI’s recent classification of stocks, the top 100 companies that have a six-month average market capitalization of more than ₹ 48,800 crores are classified as large-cap stocks. Whereas, the next 150 companies with a market capitalization of less than ₹ 48,800 crores and more than ₹ 16,800 crores are mid-cap companies.
Here are three mid-cap stocks in which brokerages see an upside of up to 36%:
Emami
Emami is engaged in the manufacturing and marketing of personal care and healthcare products with an enviable portfolio of household brand names such as BoroPlus, Navratna and so on.
Motilal Oswal has a buy call on the shares of Emami with a target price of ₹ 440.00 apiece. This implies an upside of 23.97% as compared to its share price of ₹ 354.90 apiece.
Emami is a mid-cap company with a market capitalization of ₹ 15,678 crores. It has a high return on equity of 43.71% and an ideal debt-to-equity ratio of 0.04.
Phoenix Mills Ltd
The company is engaged in the operation & management of malls, construction of commercial & residential property and hotel business in India.
Motilal Oswal Financial Services has a buy call on the shares of Phoenix Mills with a target price of ₹ 1700. This translates to an upside of 31.47% as compared to its share price of ₹ 1293.00 apiece.
Phoenix Mills operates 11 malls across eight cities in India and it is likely to be the biggest beneficiary of the forthcoming consumption boom in India. The brokerage expects the company to deliver 34% CAGR in EBITDA of its rental portfolio over FY23-25.
Phoenix Mills is a mid-cap company with a market capitalization of ₹ 23,081 crores. It has a low return on equity of 4.08% and an ideal debt-to-equity ratio of 0.56.
Ashok Leyland Ltd
Ashok Leyland is an Indian automotive and transport vehicle company that manufactures and sells commercial/passenger vehicles and power solutions. In addition, it provides financial services around vehicle and housing financing.
ICICI Direct has a buy call on the shares of Ashok Leyland with a target price of ₹ 185.00 apiece. This implies an upside of 35.43% as compared to its share price of ₹ 136.60 apiece.
The buy rating by the brokerage is driven by a cyclical recovery that is underway in the domestic commercial vehicle space amid robust capex allocation by the government in budget 2023-24.
Ashok Leyland is a mid-cap company with a market capitalization of ₹ 40,122 crores. Currently, it has a negative return on equity of 4.73% and a high debt-to-equity ratio of 3.76.
Written by Simran Bafna
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