Top 5 Mid Cap Stocks of 2019

Best Performing Mid Cap Stocks of 2019 (Highest YTD Returns)

Introduction

Which are the top 5 mid cap stocks of 2019 in Indian Equity Market? In this article, we have analysed the best mid cap stocks have given highest YTD (Yield to Date) returns for 2019.

Top 5 Mid Cap Stocks of 2019

Lets see which are these best Mid cap stocks of 2019, with best YTD performance. The key reasons behind these high returns are also discussed here.

1. Nippon India Mutual Fund Ltd.

• Reliance Nippon Life Asset Management Ltd is Nippon India Mutual Fund now, as per the announcement done on 16th October.
• The stock has given highest YTD returns in the Mid cap category. The main reasons are explained here :
• Corporate Tax Rate Cut Announcement (20^th Sept)
  • Tax Rate Changes : 31% to 25% (Increase in profitability)
• Nippon Life Stake hiked in Reliance Nippon Asset Management (RNAM) in steps (21st Feb, 18th May, 21st Aug).
  • And finally on 16th October, Nippon Life Insurance of Japan completed the acquisition of 75% stake in Reliance Nippon Life Asset Management
  • Complete exit of Reliance Capital from Reliance Nippon Life Asset Management Ltd (RNAM)
• Nippon India Mutual Fund is the second listed AMC after HDFC Asset Management. High earnings visibility of the business due to under penetration in the mutual fund industry is also one of the key factors contributing to highest YTD performance among Mid cap stocks.

2. Aavas Financiers Ltd.

• Corporate Tax Rate Cut Announcement (20^th Sept)
  • Tax Rate Changes : 31% to 25%
• Aavas Financiers received Rs.345 Cr investment from IFC, member of World Bank Group, through issuance of NCDs
• High performance driven by consistent growth in net profits :
  • Q4 FY19 : 39%
  • Q1 FY20 : 34%
  • Q2 FY20 : 42%
• Strong and sustained Buying by FIIs – QoQ Growth in FII holding :
  • Dec-18 : 11.56%
  • Mar-19 : 13.13%
  • Jun-19 : 16.57%
  • Sept-19 : 18.07%
• Key Announcement by RBI in Oct-19 Monetary Policy Meet boosting the credit growth in NBFC and Micro-finance sector.
  • RBI hikes lending limit for NBFC and Micro-finance borrowers
    • Rural : Rs.1 L to Rs.1.25 L
    • Urban / Semi urban : Rs.1.6 L to Rs.2 L
  • RBI increased the ceilings for bank’s exposure to single NBFC from 15% to 20% from its Tier-I capital

3. Manappuram Finance Ltd.

• Corporate Tax Rate Cut Announcement (20^th Sept) benefited Manappuram Finance due to increase in Net Profits due to tax rate cut.
  • Tax Rate Changes : 35% to 25%
• High performance driven by consistent growth :
  • Operating profit margin (35%, 38%, 39%) and
  • Net profits (43%, 36%, 82%) for Q4 FY19, Q1 FY20 and Q2 FY20 respectively.
• Rise in FIIs stake in March-19 quarter
  • Dec-18 : 39.44%
  • Marc-19 : 44.12%
• CRISIL upgrades Manappuram Finance’s credit rating to AA (6^th Sept)
• Loans backed by Gold – Only Asset class which was appreciating over last few months
  • Sharp rise in gold prices has given a great comfort to the business
    • 24% in last 6 months
    • 10% in last 3 months

4. Info Edge (India) Ltd.

• High Revenue growth momentum in Recruitment business (Naukri)
• Sustained growth & better margins in 99Acres
• Aggressive Investments to protect its leading market share & to gain volume share in Jeevansathi, Strong focus on Brand building of Naukri
• Rise in Expenses in Q1 & Q2 FY20 :
  • Higher Ad spends in FY20 vs FY19
  • Higher spends on promotion, product development and Technology
• CLSA, Global Asian Investment Group maintain BUY on Info Edge India (26^th Sept), citing its long-term growth drivers across its business verticals
• Jefferies maintain HOLD, raises target price for Info Edge India (4^th Nov)

5. Abbott India Ltd.

• Corporate Tax Rate Cut Announcement (20^th Sept)
  • Tax Rate Changes : 37% to 25% (Rise in Net Profits)
• Consistent Net Profit growth YoY :
  • Q4 FY19 : 7%
  • Q1 FY20 : 42%
  • Q2 FY20 : 30%
• MNC stock with premium valuation on account of clean balance-sheet and high level of transparency Excellent Quarterly performance on account of power brands and new launches driving growth
• CLSA, a Global Asian Investment Group, given BUY Rating for Abbott India
• Strong ROCE & ROE :
  • ROCE : 37.4%
  • ROE : 24%