Oracle Financial, GMR Airports, Vodafone Idea, BHEL: 14 midcap shares jumped 20-35% since election outcome

Oracle Financial Services Software Ltd, Samvardhana Motherson International Ltd (SAMIL), GMR Airports Infrastructure Ltd, Vodafone Idea Ltd, LIC Housing Finance Ltd and JSW Energy Ltd are among 14 midcap stocks that delivered 20-35 per cent return since the market crash on June 4. 

Whirlpool Of India Ltd, UNO Minda Ltd, Shriram Finance Ltd, Exide Industries Ltd, Bayer CropScience Ltd, Aditya Birla Fashion and Retail Ltd, Bharat Heavy Electricals Ltd (BHEL) and Coromandel International Ltd are other BSE midcap index constituents that delivered strong gains post the election outcome. These stocks gained even as there are some concerns over valuations in the midcap and smallcap spaces.

"It is important to highlight that the outperformance of midcaps and small caps is supported by robust earnings growth. Consensus anticipates the underlying earnings of midcap and smallcap indices to grow at a compound annual growth rate (CAGR) exceeding 20 per cent over the fiscal year 2024 to 2026, surpassing the mid-teens growth seen in the Nifty 50," said Mythili Balakrishnan, Co-Fund Manager, Alchemy Capital Management.

The higher valuations of the midcap and smallcap indices reflect this stronger underlying earnings trajectory, Balakrishnan said on June 13.

Shares of Oracle Financial climbed 35 per cent to Rs 9,842.85 apiece from Rs 7,288.55 level on June 4. SAMIL shares are up 28.51 per cent at Rs 182.30 from Rs 141.85 level. GMR Airports shares surged 28.12 per cent to Rs 97.91 from Rs 76.42. Vodafone Idea gained 27.89 per cent during the same period. 

LIC Housing Finance Ltd, JSW Energy Ltd, Whirlpool of India Ltd and UNO Minda Ltd gained 25-27 per cent. BHEL, Shriram Finance and Aditya Birla Fashion and Retail Ltd added 20-23 per cent, as per data compiled from corporate database AceEquity.

"We shift our near-term preference to the large- and top-end of the midcap range from SMID. This is because we prefer stocks with strong earnings visibility, reasonable valuations, and low risk. From a 2-3 year perspective, however, we retain our preference for SMIDs as we think the current cycle will continue to be investment over consumption and manufacturing over services," Emkay Global had said post election results.