Top 5 Mid And Small Cap Stocks Trading At Steep Discount From 52-Week High

Indian markets after continued selling pressure for last several days are in for a relief with Nifty in trade on May 17, 2022 reclaiming 16,000 level. Broader markets however are under-performing when compared to headline indices, with Nifty Midcap 100 up by over 1%, while Nifty small cap 100 still higher by 1.1%. Meanwhile, in this sharp correction, some of the mid and small cap stocks have been battered badly and are trading at steep discount of up to 63% from 52-week high.

Nazara Technologies:

For Nazara Technologies i.e. a diversified gaming and sports media platform, Yes Securities has come up with a 'Reduce' rating for a target price of Rs. 1295. This is even when the company's Q4 performance has been inline with Q4 seasonality in eSports impacting the sequential revenue growth. The cost of content as well as higher other expenses impacted the company's operating margin during the quarter. So, considering the latest recommendation on the stock, Nazara Technologies shares are well avoided.

Tata Communications:

This is another stock trading at steep discount of around 38% from 52-week high could be indeed lapped up on its improving financials and its primary indulgence or endeavours in the 5G space. Tata Communications Transformation Services (TCTS) enables Communications Service Providers (CSPs) by easing network complexity to enable versatility & scalability by network virtualisation as a groundwork. In the latest March ended quarter, the digital connectivity solutions provider reported a 22% growth in consolidated profit at Rs 365 crore. In the same quarter a-year ago, profit stood at Rs. 299.2 crore. Furthemore, Emkay Research has come out with the most bullish target price for the stock of Rs. 1650, implying potential gains of 66% from the current price.

3M India:

This is among the expensive stocks in India. The technology firm's scrip, with operations across segments including industrial, packaging, healthcare, safety and graphics and consumer, has also seen sharp correction. The stock currently trades at a premium valuation at this point considering TTM PE of 86.97 as against the sector PE of 59.25. Nevertheless on the positive side, it is a debt free concern. So, even though its financials as per the December results post a good picture with net profits registering an increase both sequentially as well as YoY one can avoid given the premium valuation.

Aarti Industries

This chemcials stock can be another good buy. Earlier Geojit has signalled a 'Buy' call on the stock for a target price of Rs. 1038. The brokerage said, "the earnings outlook remains strong at 30% CAGR over FY21-24E and RoE of ~21% (5yr avg.). It values ARTO at P/E of 33x on FY24E and recommend to Buy, with a target price of Rs. 1,038."

Amara Raja Batteries

This auto ancillaries stock is trading very close to its 52-week low price of Rs. 493.5. The company in comparison to its peers is reasonably priced with TTM PE of 14.62. While most other brokerage, gave it a 'Hold' call, Sharekhan after its Q3 numbers maintained a Buy call for a target price of Rs. 784. So, further given the company's play in the EV space through its investments for building a giga-factory, it can be a good buy seeing the future prospects in e-Mobility space.

Top 5 Mid And Small Cap Stocks Trading At Steep Discount From 52-Week High

Stock	Mid/Small cap	52-week high	Last traded price	Discount from 52-week high
Amara Raja Batteries	Small-Cap	805	514	-36.15%
Nazara	Small-Cap	3356	1236.8	-63%
3M India	Mid-cap	27800	17900	-35.61
Tata Communications	Mid-cap	1591.95	993.85	-37.57
Aarti Industries	Mid-cap	1168	758.9	-35.03

Tata Communications, Amara Raja and Aarti Industries can be good stocks to buy

So, as discussed above, Tata Communications, Amara Raja and Aarti Industries are good stocks to buy given their steep fall from 52-week high. Further we have factored in the fundamentals, financials as well as their play in future technologies that shall go well for the company as well as its share price in the medium to long term.