Tata Tele, PB Fintech Sona BLW: Every 2nd midcap needs at least 20% rally to revisit 52-week high

Even as the benchmark indices hit fresh highs on Tuesday, one out of every two midcap stocks still needed at least 20 per cent jump to revisit its 52-week highs. They included stocks such as Tata Teleservices (Maharashtra), PB Fintech, Vodafone Idea, Indian Energy Exchange and Trident, which required a 100-200 per cent rally from the prevailing levels, to reclaim their one-year highs.

Shares of Tata Teleservices (Maharashtra) needed a 192 per cent rally from Tuesday's close of Rs 99.15 to revisit its 52-week high of Rs 291.05 hit on January 11.

Shares of PB Fintech settled at Rs 459.05 on Tuesday. The stock would require a 184 per cent surge to revisit its 52-week high of Rs 1,308.35 hit on November 29, 2021. Delhivery required a 112 per cent jump over its prevailing price of Rs 334.80 to reclaim its recent high of Rs 708.45.

Vodafone Idea (107 per cent), Indian Energy Exchange (105 per cent) and Trident (101 per cent) were some other stocks that needed strong returns to reclaim their recent highs.

A total of 19 other midcap stocks including Sona BLW Precision Forgings, Nalco, Clean Science, Aavas Financiers, Indiamart Intermesh, Godrej Properties Natco Pharma, Dr Lala Pathlabs, The Ramco Cements and Voltas that are required to gain over 50 per cent to revisit one-year high levels.

Others included , ICICI Securities, Aurobindo Pharma,  Tata Elxsi, Max Financial Services, L&T Technology Services, Coforge Macrotech Developers, Hatsun Agro Product and Oil India.

In total, 78 NSE Midcap 150 constituents required over 20 per cent jump to revisit one year high. This is even as the NSE Midcap 150 index it self was just 2 per cent away from its 52-week high levels.

"Since 2022-start, about 70 per cent of NSE Midcap 150 has seen EPS downgrades, with 50 per cent suffering 10 per cent-plus downgrades. Q2FY23 earnings weren’t any different either—more than half of mid-caps faced downgrades. Over past seven quarters, upgrades have slowed, downgrades have risen and consensus is hiding in a neutral zone that is ripe for downgrades," said Nuvama Institutional Equities in a note

The domestic brokerage said the upgrades versus downgrades trend is eerily similar to 2016–17, which was followed by a huge SMID underperformance in 2018–19.

"Further, 80 per cent of mid-caps have FY24E EPS growth expectations that are higher than the FY19–23 CAGR," it noted.

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