The Indian stock market reached a new high in November 2022, and the excitement continued into December. However, things have shifted in recent days. Markets have plummeted as a result of growing Covid infections throughout the world. Concerns over the Reserve Bank of India's recent policy meeting, as well as significant macroeconomic data from the United States, have also contributed to the drop. While these short-term worries may continue to disrupt markets, it may be a good time to join the market in search of the top midcap companies for the long run.
- Gujarat Ambuja Exports - Its stock price has increased 1.6 times in five years and 46% since the start of the year. Despite this, the company is trading at a PE of 13.3 times, a 14% premium to its five-year P/E. It operates in both local and international markets and serves the food, pharmaceutical, and feed sectors. It has 12 production sites in India and sells to more than 75 countries. The edible oil divisions and maize processing are the major growth drivers that contribute to its local market position. While the maize processing unit accounts for 56% of overall income, the edible oil unit accounts for 38%.
- DCM Shriram - Its share price has increased by 50% in the last five years, rewarding shareholders. However, the share price has fallen 10% since the beginning of the year. It has a Price-to-Earnings ratio of 12.1 times, which is just a 17% premium to its 5-year median P/E of 10.2 times. DCM Shriram is an amalgamation. It operates a diverse range of companies, from chemicals and agricultural goods to sugar and cement. While chemicals and agricultural goods contribute equally to the firm, accounting for more than 51% of sales, sugar accounts for more than 40%, with the remainder coming from various cement and other smaller enterprises.
- Eris Lifesciences - Since the beginning of the year, the company's stock price has been declining. It has dropped by more than 13%. It is now trading at a PE of 23 times, which is a 6.5% discount to its 5-year median PE of 24.6 times. Eris is a pharmaceutical firm. Its income is derived from the domestic market, with subchronic and chronic treatments representing a large share of the company.
- Transport Corporation Of India - In the previous five years, the stock price has more than doubled. However, it has dropped by more than 14% since the beginning of the year. It is presently trading at a P/E ratio of 15.3 times, which is 12% lower than its 5-year average of 17.4 times. TCI is the country's leading supplier of organised freight services, having a pan-India presence. The firm provides integrated logistics and supply chain solutions to the healthcare, automotive, chemicals, and retail sectors. It has a strong position in a variety of markets, including coastal shipping, container and bulk cargo operations, and rail and road transportation. This integrated solution enables it to provide last-mile connection, distinguishing it from competitors. And the company's success over the last several years is proof of that.
- Birlasoft - The stock has not been immune to concerns of a worldwide recession harming the whole IT industry. Since the beginning of the year, the stock price has dropped by more than 35%. The firm has a well-diversified revenue stream, with the top five customers accounting for 30% of the total.
- Firstsource Solutions - The stock of the corporation has underperformed since the beginning of the year, owing to concerns about a worldwide recession. Firstsource is an IT firm that mainly serves the BFSI sectors, healthcare, and communication and media industries. The firm has a well-diversified revenue stream, with the top five customers accounting for 35% of the business.
- Craftsman Automation - The stock price of the firm has increased by 45 percent since the beginning of the year, owing mostly to an increase in demand in the vehicle market. Despite this outperformance, it is trading at a PE of 35 times, which is just a 10% premium to the 5-year median of 31.8 times. The firm is a market leader in the machining of transmission components and crucial engines for heavy and medium tractors, commercial vehicles, and off-highway vehicles. Its relatively new aluminium die-casting sector, on the other hand, has taken off.
- CAMS - The organisation has a total market share of 69.5 percent of mutual fund assets under management. Its mutual fund client list includes 10 of the top fifteen biggest mutual funds in the nation. Their major responsibility is to provide a streamlined interface to asset management firms, investors, exchanges, depositories, and other stakeholders.
- Clean Science And Technology - The company's stock price has dropped roughly 40% and is now trading at a PE ratio of 60 times, a 40% discount from its 1.5 year median PE of 86.7 times. The firm is one of the few that has successfully commercialised environmentally friendly technologies for the production of specific specialty chemicals.
- V-Guard Industries - It is a capital goods-focused electronics firm. Electronics, electricals, and consumer durables make up the business. The company's creative approaches, along with a large network of distributors, have fueled the expansion.
As appealing as smaller undervalued firms may seem, you must keep in mind that the possibility of outsized rewards is accompanied by severe volatility. Long-term investment, on the other hand, can take care of that. It may help you ride out any short-term market volatility while also giving undervalued firms enough time to realise their full potential.
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