Feel left out?

Join the midcap party with these10 stocks

In the past
year, smallcap
and
mid-cap
scrips have
been on a
roll. In the
past
few
weeks, the
BSE
Midcap index
has not just
scaled new
highs, but it has also outperformed the large-cap index so far in 2016, gaining
20 per cent as compared to the Sensexs 11 per cent gain. The upcoming
September quarter (Q2) results could witness the midcap party continuing.
Analysts suggest that close to a dozen mid-caps currently had the ability to
surprise the Dalal Street in terms of both bottomline and topline on robust
consumer demand and a strong order book. Market analysts have
recommended 10 such stocks whose price performances could sprint ahead
on an upside. They are as follows:
CITY UNION BANK:
Analysts predict that City Union Bank may report a good performance
as compared to numbers of other banks, which may be weak. The bank
is expected to gain from improving access to the end markets and
capital and physical infrastructure due to structural resets. Among small
and midcap banks, City Union Bank is a top pick of the analysts and they
expect strong margins and controlled asset quality to support Return on
Assets (RoAs) at about 1.55 per cent.

KALPATARU POWER:
It has been recorded that the stock is trading at a P/E of 15.5 times its
earnings of FY17, at a discount to its 2-year average P/E of 19.31 times.
Analysts believe firm outlook in the domestic T&D market and rising
presence in high-growth areas such as railways should help the
Kalpataru Power deliver close to 20 per cent earnings compound annual
growth rate (CAGR) over FY16-18. The analysts expect a strong revenue
growth of 26 per cent year-on-year (YoY) in the September quarter (Q2)
as execution picks up in projects won over in the last 6-9 months.
DCB BANK:
DCB Banks loan growth - 28 per cent(YoY) and deposit growth 20 per
cent(YoY) would be above industry average. Analysts expect noninterest income to grow by 43 per cent (YoY), on strong growth in
trading gains. DCB Bank is one of the cheapest among private banks
with FY17 price-to-book of 1.8 times. The market analysts expect
revenue growth to have similar contribution for net interest income
(NII) and non-interest income. They expect PAT to grow about 22 per
cent (YoY) in spite of elevated costs.
MUTHOOT FINANCE:
Muthoot Finance is expected to post one of its best quarters on the back
of strong gold prices. Margins are expected to improve year-on-year on
better auction realization, rise in lending rates and falling funding costs,
analysts informed. The scrip is trading at 2.2 times FY17 estimated
book against 2.7last year. The net interest income (NII) is expected to
grow 31 per cent (YoY) in September quarter (Q2).
MINDA CORP:
The operating margin of Minda Corp is expected to improve in Q2 due to
operating leverage benefits and enhancement in the profitability of
Minda Furukawa JV (joint venture). It is trading at an alluring valuation
of 15 times FY17 estimated earnings. Market analysts expect
consolidated revenues to grow by 24 per cent (YoY), led by strong

growth in the standalone business and effect of consolidation of Minda

Stoneridge and Panalfa financials.
RALLIS INDIA:
Rallis India shares are trading at 23.6 times FY17 estimated earnings
which is cheaper than its peers (PI Industries, Dhanuka Agritech and
Vinati Organics). The September quarter could be a strong quarter on a
feeble base for it, but Rallis will have to take full losses of Metahelix,
analysts said. This shall lead to profit after tax or PAT before minority
interest growth of 19 per cent fall to 16 per cent on post-MI basis. The
analysts expect agri-inputs to grow by 16 per cent and seeds revenues
to grow at 20 per cent (YoY) with better margins.
PI INDUSTRIES:
Analysts expect PI Industries to report healthy numbers with a
combined revenue growth of 20 per cent. Analysts say that its domestic
business growth is likely to be driven by good performance of novel
products like Keefun and Vibrant (both gaining traction). Analysts
expect a 20 per cent EPS CAGR over FY2016-18 on the back of the
consistent augmentation in its pipeline, culminating in innovator
products, and the noticeable pipeline of high-margin in-licensed
products.
WABCO INDIA:
Stock analysts estimate Wabco Indias revenues to increase by 18 per
cent(YoY), led by higher content per vehicle because of mandatory ABS
in MHCVs from 1stOctober, and growth in the after-market segment.
Analysts expect earnings momentum to be strong at a CAGR of 35 per
cent over FY1618, on the back of steady MHCV demand,
implementation of sterner safety standards driving ABS revenues, and
healthy margins, albeit royalty hike would be a drag.
TRIDENT:
Trident posted strong volume off-take in home textiles because of
strategic initiatives and efforts which were taken in the past such as

strengthening marketing team, widening product offerings and

expanding global reach. The analysts are overweight for medium to
long-term investment. The company would focus on marketing efforts
and was on track to optimally utilize its global scale capacities, said an
analyst. He added that this would help it create significant free cash
flows.
TECHNO ELECTRIC:
Techno Electric is capable of serving the whole power space, which
includes transmission, distribution and generation, aiding it adapt to
changing trends. An analyst said that Techno Electric had all the
hallmarks of a top-notch contractor. He expects revenue of 26 per cent
and EPS CAGR of 34 per cent over FY16-18 in the EPC business. He
added that valuations of 16 times of the EPC business FY18 expected
EPS was dear or expensive, however strong FCF profile justified the
multiples.
Disclaimer
The investment advice or guidance provided by way of recommendations, reports or other ways are solely the personal
views of the research team. Users are advised to use the data for the purpose of information and rely on their own
judgment while making investment decision.
Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022

Disclosure
Dynamic Equities Pvt. Ltd. is a member of NSE, BSE, MCX SX and a DP with NSDL & CDSL. It is also engaged in Investment
Advisory Services and Portfolio Management Services. Dynamic Commodities Pvt. Ltd., associate company, is a member of
MCX & NCDEX. We declare that our activities were neither suspended nor we have defaulted with any stock exchange
authority with whom we are registered. SEBI, Exchanges and Depositories have conducted the routine inspection and
based on their observations have issued advise letters or levied minor penalty on for certain operational deviations.
Answers to the Best of our knowledge and belief of Dynamic/ its Associates/ Research Analyst: DYNAMIC/its Associates/
Research Analyst/ his Relative:
Do not have any financial interest / any actual/beneficial ownership in the subject company.
Do not have any other material conflict of interest at the time of publication of the research report
Have not received any compensation from the subject company in the past twelve months
Have not managed or co-managed public offering of securities for the subject company.
Have not received any compensation for brokerage services or any products / services or any compensation or
other benefits from the subject company, nor engaged in market making activity for the subject company
Have not served as an officer, director or employee of the subject company

Article Written by
Salman Hashmi