Top performing midcap stocks: RVNL, Mazagon Dock, and Dixon Tech have gained up to 209% in 2024

In 2024, as the equity market continues to boom, midcap stocks have also participated in the bullish rally. Year-to-date (YTD), the NIFTY Midcap 150 index has surged by 24.3%, outperforming the benchmark Nifty50's 13% gain. Among the top performers, Dixon Technologies, Mazagon Dock Shipbuilders, and Rail Vikas Nigam Ltd have each rallied over 80% YTD, driven by strong financial performance and strategic growth.

Dixon Technologies (YTD return: 97%)

In its Q1FY24 earnings, the company reported a 101% YoY increase in revenue from operations to ₹6,588 crore, while EBITDA grew by 90% YoY to ₹256 crore. The profit after tax saw a remarkable 109% YoY jump, reaching ₹180 crore.

The Mobile and EMS division was the largest contributor, accounting for 79% of the revenue and 69% of the operating profit, followed by consumer electronics, home appliances, and lighting products.

The stock has gained significant investor attention after the company onboarded several large mobile customers brands in the last six months and is planning to invest $30 million in manufacturing display modules for mobile phones. This investment is expected to help the company capture a larger share of the EMS market in India, which is projected to grow to ₹4.5 lakh crore in the coming years.

Furthermore, the government's Production-Linked Incentive (PLI) scheme for white goods has incentivised Dixon to expand its manufacturing capacities. Meanwhile, the company saw CAGR rise of 42.3% in profit over the past five years.

Dixon Technologies was also recently included in the prestigious MSCI India Index, further boosting its credibility.

Mazagon Dock Shipbuilders (YTD return: 88%)

In Q1FY25, the company’s revenue from operations increased to ₹2,357 crore, up from ₹2,173 crore in the same quarter last year. EBITDA improved significantly, rising to ₹913 crore from ₹404 crore in Q1FY24. Profit after tax saw a remarkable increase, reaching ₹889 crore from ₹383 crore in Q1FY24. Margins improved dramatically to 26%, compared to just 7% in Q1FY24. As of June 30, 2024, the order book stood at ₹36,839 crore.

During the quarter, Mazagon Dock signed contracts with a European client for the construction of three additional 7,500 DWT Multi-Purpose Hybrid Powered Vessels (MPHPV), valued at approximately USD 43 million. Additionally, the company secured an export order for a total of six MPHPVs, worth about USD 85 million.

The company’s robust order book, coupled with government support through initiatives like Atmanirbhar Bharat and a focus on increasing defence exports, has made defence stocks, including Mazagon Dock, attractive to investors, driving the share price rally.

Rail Vikas Nigam Ltd (YTD return: 209%)

In Q1FY25, RVNL’s net sales stood at ₹4,073.80 crore, down 26.88% YoY from ₹5,571.57 crore. Net profit dropped by 34.7% YoY to ₹223.93 crore from ₹342.90 crore in Q1FY24. EBITDA decreased by 29.53% YoY to ₹444.48 crore, down from ₹630.71 crore. The company’s EPS also fell to ₹1.07 in Q1FY25 from ₹1.65 in Q1FY24.

Despite the decline in quarterly performance, the government's focus on modernising and expanding railway infrastructure, backed by strong budgetary allocations, has bolstered order books in the sector. This has led to increased investor interest in railway stocks, contributing to the sharp rise in RVNL’s share price.

RVNL was also recently included in the prestigious MSCI India Index, further boosting its credibility. The MSCI India Index measures the performance of large and midcap segments, with 146 constituents representing around 85% of the Indian equity market.

Conclusion

Dixon Technologies, Mazagon Dock Shipbuilders, and Rail Vikas Nigam Ltd have delivered stellar returns on a YTD basis in 2024, fueled by strong financials, strategic growth, and favourable industry trends. Therefore these stocks attracted significant investor attention leading to massive share price rallies.

Note - Stocks covered for performance evaluation are based on NIFTY Midcap 150 index.