Stocks of mid-and small-cap companies gained ground with the Nifty Midcap 50 (18,106.85 levels) and Nifty Small-cap 50 (9,648.45 levels) indices hitting their respective lifetime highs in intraday deals on Monday.
Thus far in 2026-27 (FY27), both these indices have gained nearly 21 per cent and 29 per cent, respectively as compared to 8.5 per cent rise in the Nifty 50 index.
On an intraday basis, the Nifty Smallcap 50 index slipped to 9,517.25 levels on Monday, while the Nifty Midcap 50 index hit a low of 17,910.60 levels as a knee-jerk reaction to the geopolitical developments in West Asia over the weekend.
However, both the indices recovered by close, and gained up to 0.2 per cent each. Nifty Smallcap 50 index hit a fresh closing high of 9,638.20 on Monday (previous high of 9621.15 levels hit on July 10, 2026), while the Nifty Midcap 50, too ended at a new high of 18,089.55 levels, surpassing its last high of 18,059.50 levels hit on July 10.
ALSO READ | Buy dips or sell rallies? Analysts’ strategy amid West Asia crisis, Q1 results The rise in the mid-and small-cap segments in FY27, analysts said, has been mostly on account of retail investors who continue to remain bullish on these two segments. Since foreign investors dabble mostly in the large-cap stocks, they have been laggards amid fading FII interest in Indian equities, highlighted U R Bhat, co-founder & director, Alphaniti Fintech.
“Mid-and smallcaps are the ‘go to segments’ for the retail investors. Mutual funds, too, have been getting a good subscription in the mid-and small-cap categories, and in turn, have been deploying the collection in these segments in the markets. I expect this to continue for some more time,” Bhat said.
Among individual stocks,
Bharat Heavy Electricals,
Laurus Labs, Prestige Estates Projects and Godrej Properties are some of the midcap counters that have gained up to 61 per cent thus far in FY27, data shows. On the other hand, Aegis Logistics, Welspun Corp, Neuland Laboratories, Himadri Speciality Chemical, and Bandhan Bank are some of the smallcap stocks that have zoomed up to 108 per cent during this period.
ALSO READ | Ample room for FII flows to return to India, says Goldman Sachs According to analysts at Abakkus Mutual Fund, earnings growth within the broader mid-cap segment is showing signs of an improvement. As earnings continue to improve, strong fundamentals and attractive valuations, they believe, may support mean reversion and potential catch-up in select stock prices.
“That apart, markets are increasingly rewarding businesses with strong fundamentals rather than broad market participation. With valuations becoming more reasonable and earnings outlook improving, we believe the category offers an attractive avenue for long-term wealth creation through disciplined investing,” said Vaibhav Chugh, chief executive officer at Abakkus Mutual Fund.
Chart check
On the technical charts, too, the set up for mid-and smallcap stocks remains in favour of the bulls, suggest analysts. The smallcap index, according to said Hitesh Rathi, Technical Analyst (Equity & Derivatives) at Angel One, has given a convincing breakout above its prior resistance zone (9,261), signalling a resumption of the broader uptrend. “Further, candlestick patterns suggest that buyers have regained control across multiple timeframes. It can rally to 11,050 levels in the short-term, translating into an upside potential of around 15 per cent from current levels,” he said. Echoing a similar bullish stance, Anand James, chief market strategist at Geojit Investments sees up to 5 per cent upside on both the indices, and expects the smallcaps to outperform the midcaps in the near-term. Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Reader’s discretion is advised.
