Best Mid-Cap and Small-Cap stocks buy now: Saurabh Mukherjea’s recommendation

Saurabh Mukherjea has recommended a buy of midcap stocks in the correction. The midcap companies have held up better than the largecap names. The reason for that is companies like Galaxy, GMM, Garware are $1-2 billion companies and these spaces are not large enough to attract the attention of India’s big ticket promoters or the attention of the venture capital backed plays.

No one can compete with Garware Technical which is the world leader in fishing nets for Salmon aquaculture. It is a very niche space, very specialist expertise and hence nobody tries to enter these spaces and Garware’s ROCE keeps going up year upon year, Saurabh stated.

Similarly GMM has 85% of market share in India and 55% globally. It is a 100-year old firm and with the acquisition of Pfaudler, it has very niche expertise and these niches are nicely insulated from competition. They are large but not so large and keeps on peacefully compounding away.

GMM Management has done a terrific job in taking a small Indian company and turning it into a mini multinational. It can become a global leader in glass lined and ceramic reactors.

Saurabh also recommended Alkyl Amines which is the market leader in Aliphatic Amines in India. The API industry is coming to India. Alkyl Amines is a natural beneficiary there. He also recommended Fine Organics, the market leader in emulsifiers. The food additives space is an industry where Fine Organics can do well. Obviously. these companies are small – roughly a billion dollars market cap – but their compounding and their fundamentals are stellar and therefore we look forward to many years of a happy compounding with these little champs, he stated.


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