Top 5 Mid-Cap Stocks to Watch in 2024

List of Nifty Midcap 100 Stocks

Stocks in the Nifty Midcap 100 index represent companies from the mid-cap segment. These are essentially entities that have outgrown the small-cap stage and are on the verge of becoming large-caps. The Nifty Midcap 100 stocks list features a diversified set of top companies across industries. These companies often display strong financial performance, expanding market share, and operational efficiency, making them some of the best mid-cap stocks to buy for the long term.

Top 5 Stocks in the Nifty Midcap 100 Index

• Alkem Laboratories Ltd.

One of the top companies in the Nifty Midcap 100 stocks list, Alkem Laboratories Ltd. is a trusted pharmaceutical and drug manufacturer in both domestic and international markets. The company’s focus on research and development has driven innovation in 13 key therapeutic areas. Alkem’s commitment to expanding its global footprint and enhancing its product portfolio makes it a compelling choice among mid-cap stocks to buy for the long term.

• HDFC Asset Management Company Ltd.

A leader in the financial services industry, HDFC Asset Management Company Ltd. features among the best entities in the Nifty Midcap 100 index. As one of India’s most trusted AMCs offering a wide range of mutual fund products, the company benefits from increasing investor awareness and the growing preference for market-linked financial instruments, positioning it as one of the mid-cap stocks to buy for the long term. 

• Coforge Ltd.

Coforge Ltd., a fast-growing IT services company, specialises in digital transformation, automation, and business operations. The company has consistently displayed remarkable financial performance, making it a favourite on the Nifty Midcap 100 stocks list. Coforge’s growth is fueled by its strategic partnerships and investments in innovation, which position it as one of the top mid-cap stocks to buy for the long term.

• Cummins India Ltd.

Cummins India Ltd. is a dominant player in diesel engines and power generation solutions. The company plays a pivotal role in India’s industrial growth and is one of the must-have entities from the Nifty Midcap 100 index. Cummins India’s focus on sustainability and energy-efficient technologies aligns with domestic and global trends, making it a top choice among mid-cap stocks to buy for the long term. 

• Tata Chemicals Ltd.

Tata Chemicals Ltd. is renowned for its innovations in speciality chemicals and sustainable solutions. Being a key player in the Indian chemicals industry, the company stands out in the Nifty Midcap 100 stocks list. Tata Chemicals’ growth is driven by its focus on green chemistry and expanding its footprint in the nutraceuticals and performance materials segments, making it a preferred choice from the Nifty Midcap 100 index for long-term investors. 

An Overview of Nifty Midcap 100 Stocks

These stocks are included in the Nifty Midcap 100 index, which represents the mid-cap segment of India’s equity market. As the index’s name indicates, it captures the performance of 100 tradable stocks listed on the National Stock Exchange (NSE). This index is created using the free-float market capitalisation method to ensure an accurate representation of market trends. 

The key sectors that the Nifty Midcap 100 stocks list covers include financial services, capital goods, IT, healthcare and automobiles, which collectively constitute a significant portion of the index. Rebalanced semi-annually, the index is an important benchmark for investors and fund managers focusing on the mid-cap market segment.

Tracking the Nifty Midcap 100 share prices can give you insights into the broader economic health of the mid-cap market. Historically, this segment has been known for its higher growth potential compared to large-cap stocks, although it comes with increased volatility. If you are a long-term investor, you need to consider factors like sector representation and company fundamentals before purchasing mid-cap stocks. 

What are the Benefits and Risks of Investing in Nifty Midcap 100 Stocks?

Investing in the companies on the Nifty Midcap 100 stocks list can work to your advantage in many ways. However, it may also carry specific risks that you need to factor into your investment decisions. Let us explore both sides of this investment choice. 

Benefits

• Higher Growth Potential

The Nifty Midcap 100 stocks list includes many companies that are in their growth phase. This provides a significant upside potential. With exposure to fast-growing sectors like IT and healthcare, a portfolio of these stocks may outperform large-cap stocks over time.

• Diversified Market Exposure

The Nifty Midcap 100 index represents a wide array of industries like financial services, consumer durables and capital goods. This diversity helps you reduce sector-specific risks while benefiting from the overall growth of mid-cap firms.

• Attractive Valuations and Returns

Monitoring the Nifty Midcap 100 share prices during market corrections can reveal attractive buying opportunities. Historically, mid-caps have delivered superior returns compared to large-caps during economic recoveries, making them a lucrative option.

Risks

• High Volatility

Mid-cap stocks exhibit greater price swings, as seen in the historical Nifty Midcap 100 chart. This volatility can lead to sharp corrections and make them riskier than large-cap stocks, particularly for short-term investors.

• Limited Liquidity

Compared to large-cap stocks, mid-caps may have lower trading volumes. This could potentially result in wider bid-ask spreads and increase the liquidity risk, which may impact the ease of entry and exit — particularly during volatile market conditions.

What are the Best Investment Strategies for Nifty Midcap Stocks?

Now that you have seen the advantages and challenges of choosing companies in the Nifty Midcap 100 chart, you need to have a strong investment strategy in place. The following tips can help you with this. 

• Understand the Sectoral Composition

Analysing the Nifty Midcap 100 stocks list is crucial for identifying sectoral trends and opportunities. With significant weightage in financial services, capital goods and IT, stocks in this index can help balance risks and improve returns.

• Monitor Price Trends and Valuations

Regularly tracking the Nifty Midcap 100 share prices helps you identify entry and exit points more easily. You can also use metrics like P/E ratio and price movements to assess whether mid-cap stocks are trading at fair valuations or premium levels.

• Focus on Long-Term Growth Potential

When selecting mid-cap stocks to buy for the long term, prioritise companies with strong fundamentals, proven management and clear competitive advantages. These attributes often translate into higher growth potential over extended periods.

• Leverage Technical Analysis Tools

The Nifty Midcap 100 chart can reveal historical price trends, resistance levels and support zones. Combine these insights with fundamental research to create a more comprehensive strategy for timing your investments effectively.

Should I Invest in Nifty Midcap 100 Stocks?

Companies that make up the Nifty Midcap 100 index may not be suitable for investors. So, how do you know if they are suitable for your investment plan? Here are some pointers that can help. Typically, these stocks may be suitable for the following types of investors. 

• Those Who Are Long-Term Growth Seekers

If you are seeking steady capital appreciation, you should explore the Nifty Midcap 100 stocks list. These stocks, often in growth stages, can offer higher potential returns over time. This is why they may be ideal for long-term wealth creation.

• Those Who Are Risk-Tolerant Investors

Since Nifty Midcap 100 share prices tend to fluctuate more than those of large-caps, you can benefit from this if you are comfortable with higher volatility. Mid-cap stocks often reward investors with substantial gains during favourable market cycles.

• Those Who Seek Portfolio Diversification 

Individuals aiming for a balanced portfolio may also consider mid-cap stocks to buy for the long term. These stocks bridge the gap between the stability of large-caps and the aggressive growth potential of small-caps.

• Those Who Are Index-Focused 

Those interested in broad market exposure without betting on individual stocks can invest in the Nifty Midcap 100 index through index funds and ETFs. These avenues may provide diversified access to India’s mid-cap segment.

FAQs

1. What is the Nifty Midcap 100 index? 

This index, which tracks 100 midcap stocks on the NSE, represents the midcap market segment. It uses the free-float market capitalisation method.

2. How to find the best companies to invest in from the Nifty Midcap 100 stocks list?

To find the best mid-cap companies to invest in, evaluate the fundamentals, check the growth potential and assess sectoral performance.

3. How often do the stocks in the Nifty Midcap 100 index change? 

The Nifty Midcap 100 index is rebalanced semi-annually after considering stock performance and general market criteria.

4. Which is the best sector in the Nifty Midcap 100 index?

The best sector for investments depends on market trends and your individual investment goals because sector performance varies over time.

5. Can the Nifty Midcap 100 chart reveal price trends? 

Yes, it can show you historical price trends, consolidation phases and resistance and support levels — all of which are useful in technical analysis.