A Closer Look at the Midcap Underachievers

The Nifty Midcap 100 index has had an impressive run, delivering about a 55% return in the past year. However, not all midcap stocks have shared in this success. Some have significantly underperformed the benchmark, earning them the dubious title of “wealth destroyers.” Let’s take a closer look at the top five midcap stocks that have fallen short.

1. One 97 Communications Ltd (Paytm)

Current Price: Rs 463.75
Market Capitalization: Rs 29,507.21 crore
Return over 1 year: -40.63%

Paytm, India’s leading digital ecosystem platform, has not lived up to investors’ expectations over the past year. Despite its extensive reach, with over 300 million users and 20 million merchants using its platform to accept payments, Paytm’s stock has declined sharply. The company offers a wide range of services, from bill payments to booking movie and travel tickets, but this hasn’t translated into positive returns for its shareholders recently.

2. Adani Wilmar Ltd

Current Price: Rs 327.8
Market Capitalization: Rs 42,603.50 crore
Return over 1 year: -20.65%

Adani Wilmar is a major player in India’s FMCG sector, providing essential kitchen commodities such as edible oil, wheat flour, rice, pulses, and sugar. Formed as a joint venture between the Adani Group and the Wilmar Group, the company serves a broad spectrum of customers with a variety of products. However, its stock performance has lagged, reflecting a significant decline over the past year.

3. IIFL Finance Ltd

Current Price: Rs 452.8
Market Capitalization: Rs 19,207.36 crore
Return over 1 year: -20.01%

IIFL Finance Ltd, a diversified non-banking financial company (NBFC), offers a wide range of financial products including home loans, gold loans, business loans, microfinance, and more. Despite its extensive product portfolio, the company’s stock has seen a substantial drop, disappointing investors who were expecting better performance.

4. Navin Fluorine International Ltd

Current Price: Rs 3557.5
Market Capitalization: Rs 17,641.31 crore
Return over 1 year: -17.61%

Navin Fluorine is involved in the production of refrigeration gases, inorganic fluorides, specialty organofluorines, and contract research and manufacturing services. With a portfolio that includes over 50 fluorinated compounds, one might expect strong performance. However, the stock has underperformed, reflecting challenges that have impacted its market standing.

5. UPL Ltd

Current Price: Rs 540.7
Market Capitalization: Rs 40,585.32 crore
Return over 1 year: -15.52%

UPL is a global player in the agrochemicals and specialty chemicals industry, also engaged in the production and sale of field crops and vegetable seeds. Despite its strong market presence and diversified product range, UPL’s stock has not fared well, registering a notable decline over the past year.

Conclusion

While the Nifty Midcap 100 has soared, delivering impressive returns, these five midcap stocks have struggled significantly, underperforming by a large margin. Investors in One 97 Communications, Adani Wilmar, IIFL Finance, Navin Fluorine, and UPL have faced substantial losses, highlighting the volatile and unpredictable nature of the stock market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.