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These 15 stocks are Motilal Oswal's top bets in midcap space

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The midcap index has significantly underperformed the Nifty index since December 2017 due to higher valuations premium vs the largecaps, macro headwinds, concerns about governance/liquidity issues, and the lack of pick-up in earnings growth, said Motilal Oswal Financial Service (MOFSL) in a report.

These 15 stocks are Motilal Oswal's top bets in midcap space
The midcap index has significantly underperformed the Nifty index since December 2017 due to higher valuations premium vs the largecaps, macro headwinds, concerns about governance/liquidity issues, and the lack of pick-up in earnings growth, said Motilal Oswal Financial Service (MOFSL) in a report.
Nifty Midcap 100 index has lost 21 percent since December 2017 while the Nifty index has gained 3 percent in the corresponding period.
"Over the last 12 years, the correction in midcaps from the peak to the bottom has been much higher relative to large caps in almost every episode of correction, barring one. The average difference in peak-to-bottom correction between the Midcap 100 and the Nifty in the past has been around 10-15 percent," MOFSL said in a report dated March 6.
But in the last one month, the Nifty Midcap index advanced over 4.5 percent, while the Nifty Smallcap index rose nearly 8 percent. In comparison, Nifty50 was up just 2 percent.
Analysts at MOFSL believe that the broad underperformance of the mid-caps is overdone and opportunities are now available in this space across sectors amid hopes of earnings recovery.
Given the rebound in the asset quality metrics of PSU banks and the consequent reduction in provisioning costs, the profits for the mid-cap index are expected to recover significantly, according to analysts.
Overall, the mid and smallcap universe is expected to post 91 percent y-o-y PAT growth in FY19. While, excluding PSU banks, growth in FY19 is expected at 16 percent versus 12 percent in FY18, the report added.
The brokerage has picked 15 stocks in their list of preferred midcap stocks. The list includes M&M Financial, Page Industries, Sun TV, LIC Housing Finance, Alkem Labs, Emami, Federal Bank, Indian Hotels and JSPL, among others.
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