September market correction does not spare mid-caps too

HOW MID-CAPS PERFORMED IN SEPTEMBER 2026?

While the mid-caps had been outperforming large caps in July and August, they also joined in the market fall in September. Mid-Cap 100 index was down -6.67% MOM but up by 3.64% yoy. Mid-caps had rallied close to yearly highs and the triple-risk of rising crude prices, falling rupee, and rising bond yields had its impact on mid-caps too.

The Mid-Cap index is now 7.94% below its 52-week high, which is a better swing than the large caps. Out of the 100 stocks, only 15 stocks gave positive returns over 1-month, but 50 stocks gave positive returns over 1-year. There were 26 companies bouncing over 40% from yearly lows and 16 companies less than 10% from their peak prices.

Data Source: NSE Note: All the percentage changes shown above are point-to-point returns and have not been annualized. The combined rank score is just a theoretical number for representation purpose.

ARRIVING AT THE COMBINED RANKS FOR MID-CAP STOCKS

• For a momentum view, we considered the 1-month returns and the proximity to the yearly high price (swing) to capture short-term drivers of the stock price.

• For a more structural view, the 1-year returns and bounce from the yearly rows are considered. They capture the secular story in the Mid-Cap 100 stocks.

• The combined rank, on which companies are ranked, is the average of the above 4 factor ranks, making it an equal-weight mix of momentum and structural factors.

• Several IPOs with less than 1-year listing history are among the top-20. In such cases, the IPO price has been taken as the base for calculating 1-year returns.

WHAT WE READ FROM THE MID-CAP RANKINGS FOR SEPTEMBER 2026?

Here are key takeaways from Mid-Cap performance for period ending September 2026.

• In the Top-20 mid-cap stocks by combined rank, Meesho gave best 1-month return of 9.71%. Out of these 20 winners, 11 gave positive returns over 1 month.

• In the Top-20 stocks list, Laurus Labs and Apar Industries gave best 1-year returns of 128.6% and 111.6%. Each of the top-20 mid-cap stocks gave positive 1-year returns.

• The most prominent sector in the top-20 mid-caps by combined rankings was financial intermediation with 6 stocks; including MCX, Paytm, Groww, ICICI AMC, Motilal Oswal, and Bank of Maharashtra. The focus has been more on companies enabling digital financial transactions and simplifying channelling of savings.

• Healthcare stocks gained on the back of CDMO prospects, and opportunities in big global drugs going off patents. Laurus Labs, Aurobindo, and Mankind figured in the top-20 list. These stocks had short and long-term momentum in their favour.

• Digital ecommerce platforms sent 3 big names to the top-20 list. This included Lenskart, Meesho, and Nykaa. As an extension, there was a surge in the performance of customer facing stocks like LG Electronics, Indian Hotels, and Kalyan Jewellers.

• If digital and financial enablement were the sectoral stories, the interesting theme was of IPOs. Five of the top-20 stocks were IPOs in the last 1 year; Lenskart, Meesho, LG electronics, Groww, and ICICI AMC. Clearly, IPO pricing has been conservative.

• The stocks at the bottom are hardly a surprise. PB Fintech was hit by the IRDA proposal to cap insurance commissions. RE companies like Suzlon and Waaree were hit by higher input costs and export restrictions. Defence stocks like BDL and Cochin Shipyards are also seeing selling due to time overruns in order execution

In the mid-cap space, the broad preference seems to be for companies and products linked to consumer demand. After all, that is the most credible India story today!