How Mid-Caps bucked the falling trend in the markets

WHY MID-CAP STOCKS OUTPERFORMED IN MAY 2026?

For the month of May 2026, the Nifty Mid-Cap 100 was up 2.2% MOM and 7.4% up on yoy basis. Unlike the large caps, the mid-caps have thrived on their focused business models. Mid-caps are also less vulnerable to FPI outflows, oil price spikes, and rupee weakness. Within the mid-cap space, there have been select themes that have done exceptionally well. Here is our four-factor ranking model for Nifty Mid-Cap 100 stocks.

HOW WE RANKED THE MID-CAP OUTPERFORMERS

• The ranking has been done on a combination of short-term and long-term factors. 1-Month Returns and Proximity to peak price represent short term factors.

• The long-term factors include 1-Year returns and the bounce from the lows of the year; with the latter being indicative of the resilience of the particular stock.

• Once the best stocks are ranked on these 4 categories, the average rank is computed and the best average ranks are shown in the table to give a 360-degree picture.

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

Here we look at the rankings statistically, and then at the sectoral themes implied.

• The top-20 stocks had an average 1-month return of 13.6% and average 1-year return of 58.5%. If you look at the bounce from lows of these 20 stocks, it stood at an impressive level of 78.3%, while the swing from peak averaged a low 4.0%.

• The most prominent sector in the top-20 is power equipment sector with 5 stocks in the list including Hitachi, BHEL, GE Vernova, Polycab, and KEI. These are seen as domestic proxies for infrastructure with less cyclical demand patterns.

• Another key sector in the top-20 was the financial inclusion space with 4 stocks viz, BSE, Aditya Birla Capital, Yes Bank, and Federal Bank. With rate hikes expected, most NBFCs are expected to improve on their spreads. BSE was more on rising volumes.

• Metals and Energy were two spaces that are likely to benefit directly from the ongoing geopolitical turmoil. The top-20 list included 2 metal stocks (SAIL, NALCO) and 2 energy stocks (Adani Total Gas, JSW Energy). Prices have been on an uptrend.

• Among the remaining stocks in the top-20, telecom sent 3 stocks (TCOM, VI, Indus Towers); while healthcare sent Laurus Labs and Biocon. Both these sectors are seen more as defensive bets; a rather safe idea amidst the global geopolitical uncertainty.

• Finally, a quick look at the stocks ranked low down among mid-caps. Most of them had very stock-specific stories. This includes stocks like RVNL, Kalyan Jewels, Jubilant Foods, Bharat Dynamics, IRCTC, Swiggy, PI Industries, SBI Cards etc.

The good news is; mid-cap index managed to scale new highs, even in troubled times.