Contra Bets: 3 Midcaps with ‘Highest’ Profit Margins!

The midcap is one of the best spaces for investors who are willing to take some risk but not as high as small caps and as low as blue chips. In fact, it is kind of a sweet spot for long-term investors who are looking for decent growth but also want to avoid extreme volatility in the small-cap space. 

There are many midcaps that are doing well, sailing beautifully through this uncertain environment. Profit margins are one of the key factors investors consider to measure the financial strength of a business. In that vein, here are 3 midcaps from the benchmark 100 index, that have clocked the highest profit margins in FY22 and some of them are quite beaten down.

Indian Energy Exchange Limited

The first stock on the list is Indian Energy Exchange Ltd (NS:) which is a power exchange that facilitates the trading of electricity, green energy and certificates. It has a market capitalization of INR 12,838 crores, essentially making it a smallcap as the stock more than halved from the last year’s high but the results were top-notch in the last fiscal year.

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In FY22, the company reported a record-high revenue of INR 491.83 crores, and the profit figure also jumped to an all-time high of 309.26 crores. This translated into a profit margin of a gigantic 62.88%, up from 57.85% in FY21. No other company in the midcap space comes even close to this.

Nippon Life India Asset Management Limited

Nippon Life India Asset Management Ltd (NS:) is an asset management company with a market capitalization of INR 16,729 crores. The same story happened with this counter – it more than halved in price in around a year, hence turning it into a small cap now. 

In FY22, the company’s net income grew to INR 744.06 crores, compared to INR 680.33 crores in FY21, which was the highest ever. On the margin front, the company secured a 48.46% profit margin which was the second-highest in the Nifty Midcap 100 index. FIIs also hold a stake of around 6.37% in the company, which has risen from 6.21% in June 2021.

Sun Tv Network Limited

The last name on the list is Sun TV Network Ltd (NS:) which is a Tv channel and broadcaster with a market capitalization of INR 21,442 crores. The stock is trading at a P/E ratio of 13.06, while the dividend yield is a decent 2.53%. 

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The company ended FY22 with the highest profit on the books, at INR 1,641.80 crores, while the TTM profit is even higher at, INR 1,770.5 crores, showing continued momentum in the robust financial performance. The Profit margin for FY22 remained at 42.75% which was noticeably up from the FY20 figure of 36.64%.


Disclaimer: None of the stocks mentioned above is a recommendation to buy/sell/hold.

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