News

This is a Mint Premium article gifted to you. Subscribe to enjoy similar stories.

Midcap and small-cap segments represent dynamic and critical components of the equity market, offering both enticing growth opportunities and distinct risks. These segments typically include companies that, while not as well-established as large-cap firms, have significant expansion potential. The last few months have been quite challenging, and we will need to mix our approach with the objective of generating some returns.

Also Read: Lodha Developers pre-sales dull, but business development activity remains solid

Also Read: With ₹3.4 trillion already in, are DIIs the new market movers from here on?

Midcap stocks have staged a strong comeback by June 2025, reclaiming investor confidence after a turbulent start to the year. The midcap indices closed at an encouraging point, marking a steady uptrend and staying above key moving averages. This resurgence is underpinned by a confluence of favourable factors: softening inflation, a dovish monetary policy stance, and robust earnings growth in the midcap segment.

The Reserve Bank of India’s recent 50 basis point rate cut—its third in 2025—has improved liquidity, while a 100 bps CRR reduction is expected to inject ₹2.5 lakh crore into the system. These moves have bolstered domestic sentiment and revived foreign institutional flows. Midcap companies, in particular, have outperformed, with the Nifty Midcap 150 reporting a 21% rise in profits in Q4 FY25.

Valuations, which had corrected sharply earlier in the year, are now seen as attractive, especially in sectors like capital goods, financials, and building materials. With above-average monsoon forecasts supporting rural demand and global rate stability on the horizon, analysts believe the midcap rally has legs—provided earnings momentum and macro stability persist.

Raja Venkatraman is the co-founder of 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.

Download the Mint app and read premium stories

Log in to our website to save your bookmarks. It'll just take a moment.

You are just one step away from creating your watchlist!

Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.

Your session has expired, please login again.

You are now subscribed to our newsletters. In case you can’t find any email from our side, please check the spam folder.

This is a subscriber only feature Subscribe Now to get daily updates on WhatsApp