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7 Preferred Midcap & Smallcap Stocks To Buy After Market Destruction


Markets have seen relentless selling pressure over the last few trading sessions. Here are a few midcap and small cap stocks to buy as recommended by broking firm Motilal Oswal in its latest India Strategy - Eagle Eye report.

7 Preferred Midcap & Smallcap Stocks To Buy After Market Destruction

Preferred micap and small cap stocks to buy

Current market priceP/E based on FY 2023 eps
Chola InvestmentRs 66821.1
Macrotech DevelopersRs 98629.17
Ashok LeylandRs 12243
Dalmia BharatRs 141935.83
APL Apollo TubesRs 95735.31
GR InfraRs 143117.22
Angel OneRs 148615.84

The EPS for 2023 have been taken from the broking projections of Motilal Oswal. However, we have calculated the p/e ourselves since the market price of the stocks have crashed, warranting a change in the p/e. For eg, the market share of Angel One has crashed 6% on account of today's market downturn, which lowers the p/e multiple. All of the above are the preferred picks of Motilal Oswal in its latest Eagle Eye report.

Our own take on the above stocks

We believe that one needs to buy into these stocks with caution, thanks to the volatility in the markets. Fundamentally, all of these stocks look sound, though in some cases valuations are a reason for concern. In any case, one needs to be cautious on the markets as a whole and buy only on declines.
All of the stocks mentioned above are from the midcap and small cap space. According to Motilal Oswal, during the last 12 months, midcaps have risen 23% (v/s a 17% rise for the Nifty) while in the last five years, midcaps have underperformed by 19%.

Oil & Gas, Consumer and Auto stocks outperform in Apr'2

According to the India Strategy - the Eagle Eye Report by Motilal Oswal Financial Services Limited (MOFSL), Oil & Gas, Consumer and Automobiles sectors outperformed in Apr'22. On the other hand, the Technology sector was the main laggard. Overall, Global equity markets declined in Apr'22 due to concerns on inflation and monetary tightening. 60% of BSE 200 constituents have gained in Apr'22. The 4QFY22 earnings were in line so far with EBITDA margin seen impacted. For the Motilal Oswal Financial Services Universe (65 companies), sales/EBITDA/PBT/PAT growth stands at 19%/14%/26%/30% YoY (v/s MOFSL's expectation of 18%/15%/23%/22% YoY), respectively.

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