NIFTY midcap 100 index hits record high, outperforming its largecap and smallcap peers; here's why

As investors and traders await benchmark indices like NIFTY50 and SENSEX hitting record high levels, the broader index won the race first amongst both. The NIFTY midcap 100 index hit a new record high at 61,011, breaking the previous record level of 60,925 touched in September 2024. Meanwhile, NIFTY50 struggled to close above 26,200 in 2025, and the small-cap 100 index traded nearly 8% away from the previous record highs.

Strong and consistent earnings growth

The midcap companies have collectively posted strong earnings growth in comparison with the NIFTY50 and the NIFTY Smallcap 100 index in Q2FY26 on a yearly basis. According to Ace Equity data, for the 80 companies that declared results in the Q2 earnings season from the NIFTY midcap 100 index, the topline growth jumped by 7% YoY, and the profit after tax jumped 27% YoY. While for NIFTY50, 45 companies that reported Q2 earnings till date reported 10.4% YoY profit growth. Meanwhile, the NIFTY Smallcap 100 index, 88 companies reported 2.4% YoY profit after tax growth.

Affordable valuation

With superior growth in corporate earnings, valuations have traded in a reasonable range. The NIFTY midcap 100 price-to-earnings ratio continues to trade near its 3-year median range. The NIFTY midcap 100 price-to-earnings ratio stands at 33x as close to its 3-year median ratio of 32x and 1-year median of 32x. Whereas the NIFTY smallcap 100 index continues to trade at a premium to the median valuation of 3 years. Affordable valuations in relation to peer broader indices led to strong buying interest by investors across the board.

Technical breakout levels

On technical charts, the index shows a breakout on the longer-term weekly charts. The NIFTY midcap 100 index is currently showing a breakout from the cup and candlestick chart pattern, which indicates renewed bullish momentum in the index after a long period of consolidation.

Top gainers and losers

As the index touched new record high levels, stocks like L&T Finance (112%) , Muthoot Finance (89%), BSE (77%), Aditya Birla Corp (69%), Paytm (68%), Hitachi Energy (68%), Indian Bank (53%), AU Small Finance Bank (53%), Fortis Healthcare (53%), Bharat Dynamics (49%) were the top 10 gainers in the index for the period of one year. Tata Technologies (-31%), Oracle Financial Services (-30%), Sona BLW Precision (-28%), Kalyan Jewellers (-27%), RVNL (-27%), and IREDA (-23%) were the top losers for the same period.

In summary, superior earnings growth and reasonable valuations bode well for the NIFTY Midcap 100 index. The rally to record highs was primarily led by finance stocks, which hold a strong weightage in the index.