After a turbulent phase, the mid cap and small cap segments demand a review. These pockets of the market, while inherently volatile, offer fertile ground for growth. But in the current landscape, balancing risk with return potential isn’t just prudent, it’s essential.
Three mid cap stocks to trade, recommended by NeoTrader’s Raja Venkatraman
NATIONALUM: Buy above ₹213 and on dips to ₹203, stop ₹197, target ₹225-235
CENTURYPLY: Buy above ₹805 and on dips to ₹770, stop ₹750, target ₹875-895
VARROC: Buy above ₹603 and on dips to ₹570, stop ₹550, target ₹660-680
How the mid cap sector has performed
Indian mid cap stocks have delivered a strong performance since the RBI rate cut, despite some moderation in growth in Q1FY26 results.
The Nifty Midcap 150 index remained bullish throughout August and early September, closing around 21,150 points and trading near its yearly highs. However, recent sessions saw minor profit-taking, with the index ending 0.63% lower on 4 September following strong rallies earlier in the week.
Top gainers included MRF, Rail Vikas, Apollo Tyres, and NALCO, which posted daily gains in the range 4-6%. More than 20 mid cap stocks saw weekly gains of 10-20%, signalling robust sectoral momentum.
But Q1 earnings for mid caps have proved to be a mixed bag. The Nifty Midcap 150 companies posted an aggregate earnings growth of 17% year-on-year, outpacing both large and small cap peers. However, profit growth for some mid caps slowed to just 1%, the lowest in seven quarters. Pressure on operating margins was evident, with mid caps reporting a decline from 18.2% to 17.7%.
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The RBI’s rate cut has improved domestic liquidity and lowered borrowing costs, benefiting interest-sensitive mid cap sectors such as finance, real estate, and consumer durables. Simultaneously, the latest GST cuts for consumer essentials could further boost demand and favor mid cap companies in manufacturing, retail and consumption-linked industries.
Three mid cap stocks to trade today, recommended by NeoTrader’s Raja Venkatraman
NATIONALUM (current price: ₹212.14)
Buy above ₹213 and on dips to ₹203, stop ₹197, target ₹225-235
- Why it’s recommended: Muted Q4 numbers ensured the trends were unable to recover. However, the recent turnaround in the metal sector helped prices stabilise in the most recent quarter. The steady long body bullish candle seen last week augurs well, leading to an improvement in the sentiment. With prices holding firm we can consider going long.
- Key metrics:
- P/E: 6.68
- 52-week high: ₹262.99
- Volume: 8.99M
- Technical analysis: Support at ₹1,450, resistance at ₹2,150
- Risk factors: Market volatility and cyberattack and regulatory headwinds
- Buy above: ₹213 and dips to ₹203
- Target price: ₹225-235 in one month
- Stop loss: ₹197
CENTURYPLY (current price ₹803.80)
Buy above ₹805 and on dips to ₹770, stop ₹750, target ₹875-895
- Why it’s recommended: Volatile moves in the past three months are now giving way to the possibility of a move upwards as a rounding pattern is seen forming with volumes. Can look to go long.
- Key metrics:
- P/E: 64.23
- 52-week high: ₹935
- Volume: 102.45K
- Technical analysis: Support at ₹477, resistance at ₹685
- Risk factors: Geopolitical uncertainties, market trends
- Buy at: Current price and on dips to ₹542
- Target price: ₹640-655 in one month.
- Stop loss: ₹535
VARROC (current price ₹605.05)
Buy above ₹603 and on dips to ₹570, stop ₹550, target ₹660-680
- Why it’s recommended: The counter has been consolidating for a while steadily moving higher, forming higher high and higher lows while holding the TS & KS Bands for the past few days. After a brief decline the stock managed to gather support within the bands and produce a turnaround. Look to buy.
- Key metrics:
- P/E: 32.32
- 52-week high: ₹649
- volume: 804.37K
- Technical analysis: Support at ₹225, resistance at ₹295
- Risk factors: Fluctuating demand from the domestic tractor segment, which is experiencing pressure due to various factors
- Buy at: above ₹603 and on dips to ₹570
- Target price: ₹660-680 in one month
- Stop loss: ₹550
Outlook for mid caps
In summary, the mid cap sector continues to display robust momentum on the NSE, supported by improved liquidity, lower GST rates, and broad-based earnings growth in Q1 FY26. Investors should monitor margin trends and sector-specific growth rates in coming quarters.
Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.
Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
