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This mutual fund expert sees strong growth potential in midcap stocksSandeep Bagla of TRUST Mutual Fund sees strong growth potential in Indian midcap equities, driven by economic expansion, policy support, and sectors like technology, consumption, and energy.By Anshul  February 25, 2026, 2:27:21 PM IST (Published)2 Min ReadMidcap equities in India could offer significant growth potential over the next few years, according to Sandeep Bagla, CEO of TRUST Mutual Fund. Bagla points to a combination of favorable economic conditions, corporate earnings momentum, and policy support as drivers for renewed investor interest in the segment.

Structural growth supports midcaps

“Midcap companies have historically delivered strong risk-adjusted returns during periods of economic expansion and rising corporate profitability,” Bagla explained. Many leading firms in technology, consumption, and emerging government-focused sectors fall within the midcap range, with valuations currently below historical peaks.

He noted that midcap index earnings are expected to grow around 21% annually over the next two years.

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Opportunities amid market volatility

Bagla acknowledged that midcaps are sensitive to market swings and macroeconomic shifts, including global trade developments, technology disruptions, and policy changes.

“While corrections are possible, supportive government initiatives for manufacturing and MSMEs, along with potential inclusion in larger indices, can create long-term value,” he said.

Long-term focus for investors

For investors, Bagla recommends a medium- to long-term horizon.

“Short-term volatility can obscure the actual growth potential. A structured investment approach, such as Terminal Value investing, helps identify companies that can sustain performance over a full market cycle,” he explained.

Choosing the right fund should consider investment style, fund philosophy, risk appetite, and expense ratio.

Sectors to watch

Mid-sized companies with scalable business models and access to cost-efficient credit are positioned to benefit from structural demand tailwinds. Bagla highlighted technology, consumption, energy, and renewable sectors as areas where midcap firms can achieve sustainable growth and profitability.

He also emphasised that mutual funds offer a less volatile route than individual stock selection for participating in this segment.

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