Dec 03 2023, 07:45
5 mid cap stocks with right levels of RoE and upside up to 22%:
Investing in mid-cap stocks is always a challenge for any investor in any market conditions. This challenge gets much bigger when the valuations are extremely high. In such times, it would be better that investors should be cautious in selecting the stocks, better to go with buying in smaller quantities and keep some cash allocated for the stocks, but only to be used on the day when there is absolutely chaos on the street.
Every sector has a different operating matrix which has high correlation with returns companies in that industry are able to generate. For some industries like software and services,15 to 20 percent net margins would be normal. For others, like construction and contractors even the best players struggle to move to double digit margin. Whether it is RoCE, ROE or net margins all is dependent on the underlying business.
There is a range for each sector and industry. Expecting a commodity business to have double digit margins year after year would be wrong, though there would be time when metal companies will mint money, but then suffer for a long time when metal prices remain under pressure. So, the bigger question is how sustainable that number is.
Mid Cap Stocks with Net Margin & RoE
Upside Potential-Dec 2, 2023
Company CMS Info Systems
Name
Avg 10
Score
Reco Strong Buy
Analyst 6
Count
Upside 22.6
Potential
Net 15.8 Margin
ROE 20.9
Inst 39.6 Stake
Market 6,257
Cap Rs
Cr
Company Godfrey Phillips India
Name
Avg 7 Score
Reco Strong Buy
Analyst 1
Count
Upside 22.0 Potential
%
Net 20.5 Margin
RoE% 232
Inst 10.1 Stake
Market 10,791
Cap Rs
Cr
Company Sula Vineyards
Name
Avg
5
Score
Reco Buy
Analyst 3 Count
Upside 21.4
Potential
Net 15.2
Margin
ROES 181
Inst
378
Stake
Market 3,971 Cap Rs
Company Spandana Sphoorty Financial
Name
Avg
4
Score
Reco Strong Buy
Analyst 6
Count
Upside 19.2 Potential
Net 222
Margin RoE% 13.5
Inst 17.9 Stake
Market 7,205 Cap Rs
Cr
source: et
Dec 03 2023, 10:07