Mid-caps beat Sensex, BSE-500

Mid-cap stocks have outperformed the overall market in the first quarter of financial year 2010-11. The Bombay Stock Exchange’s (BSE’s) midcap index rose five per cent in the period while the Sensex rose one per cent.

The broader index, the BSE-500, has moved with the BSE-200 index — both are up 2.5 per cent.

However, the small-cap index has beaten all benchmark indices with a rise of 6.75 per cent. Among sectoral indices, FMCG, consumer durables, auto, healthcare and oil & gas have outperformed, while power, IT, Bankex, realty and metal have underperformed the mid-cap index.
 

ON MIDDLE PATH BSE Benchmark Indices
Date	31-Mar	30-Jun	% chg
Smallcap	8497.43	9071.20	6.75
Midcap	6806.18	7149.21	5.04
BSE-500	6919.55	7092.20	2.50
BSE-200	2199.50	2248.06	2.21
BSE-100	9300.20	9442.58	1.53
Sensex	17527.77	17700.90	0.99
Compiled by BS Research Bureau

Kamlesh Kotak, vice-president, research, Asian Market Securities, said, “Many mid- and small-cap stocks are expected to report strong numbers and are reasonable priced. Investors prefer these as frontline or large-cap stocks are likely to be under the selling pressure of foreign institutional investors in the near term. However, investors should be choosy and differentiate between fundamental stories and momentum frenzies, as all small- and mid-caps stocks are not good.”

Dharmesh Mehta, managing director, Institutional Equities, Enam Securities, said, “Large-cap stocks are properly valued at this point in time. The Sensex is trading at a price to earnings (P/E) multiple of 21 while the mid-cap index is at 16 times.

Mid- and small-cap stocks are bought mostly by institutional players and retail investors. There are strong companies in this segment with market caps of Rs 2,000-4,000 crore”, he said.

Sandeep Shenoy, head of research at Antique Securities, indicated in his report on mid-cap ideas for 2010 that though India took 60 years to emerge as a trillion-dollar economy, it should double this in the current decade.

He said the decade would create an unprecedented value-creation opportunity for those looking for investment options in companies evolving from micro-caps to mid-caps and from mid-caps to large-caps.

However, the individual performance of stocks in the BSE mid-cap index has been mix. Out of 262 stocks in the mid-cap segment, over 61 per cent rose 14.5 per cent on an average while the remaining 39 per cent reported a 10.9 per cent decline. Kirloskar Industries outperformed all with over 140 per cent rise. Among others, HSBC Investdirect, Whirlpool, AstraZeneca Pharma, Fresenius Kabi Oncology and Coromandel International gained over 50 per cent each. Among losers, Triveni Engineering, McLeod Russell, Max India, Geekay Finance, Prakash Industries, United Brew Holdings, Aban Offshore, OnMobile Global, Educomp Solutions, Rajesh Exports and Kwality Dairy declined 25-35 per cent.