Six midcap stocks Prabhudas Lilladher is bullish on and why

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26 Aug, 2025 12:21

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Moneycontrol BureauMidcap stocks were clear winners last month, even outperforming largecaps by a huge margin, finds a report by Prabhudas Liladher. On a month-on-month as well as on a calendar year-to-date basis, the BSE Midcap Index punched above its weight, growing 6.1 percent and 20.9 percent, respectively.A large trigger for the midcaps' strong performance has been domestic tailwinds. The 10 year G-Sec Yield is trading at 7.04 percent -- lowest in the last seven years.The increased liquidity is pushing bond yields to move down. With the RBI relying more on open market operations than on policy rate changes to manage liquidity, the cost of funds have reduced for the financial services companies and the corporates who use more of credit substitutes. Prabhudas Liladher believes that the increased outperformance have also led to valuations becoming stretched in many midcap stocks. Here are its top six midcap stocks.Hexaware Technologies: Its performance is heartening against a backdrop ofrevenue/margin miss by most mid‐cap peers. Retain 'Accumulate' with a target price of Rs 255 based on 16x CY17 Earings per Share.Sadbhav Engineering: Sadbhav will be the key beneficiary of strong outlook in road sector and improving outlook in Mining and Irrigation sector, says Prabhudas, which has a revised target price of Rs 351.SpiceJet: SpiceJet's focus on cargo services and other ancillary services like food and beverage is expected to result in increasing share of cargo services revenues significantly from 2.9 percnt of sales in FY15. Fleet size expansion will also result in benefits for company. Target price: Rs 115.VRL Logistics: VRL may emerge as a key beneficiary with almost double-digit volume growth as we anticipate 20 percent increased availability of GT vehicles. Further, VRL is much better placed to garner volume shift from unorganised to organized segment. Target Price: Rs 360.NIIT Technologies: Fresh order intake for NIIT Tech was at USD 101 million driven by large wins from USA and UK. Company expects steady growth in remaining of FY17 driven by ramp‐up of deals and stability in servicesbusiness. Target Price: Rs 600.Navneet Education: Navneet’s strategy of subscription-based model is strong point for company and Prabhudas expects it to deliver exponential growth in revenues over the next 3-5 years. Target Price: Rs 124.