Mid-cap stocks see a sharp decline in 2025. Now is the time to take shelter in a big cap? What experts suggest

After enjoying strong returns in the last few years, mid-cap and small-cap stocks have come under significant sales pressure in 2025, many experts have now advocated a change. Big Cap Stock Between the ongoing market recession.

The Indian stock market is struggling with heavy sales pressure this year, which is due to tireless foreign capital outflow, weak corporate earnings and a fall in the rupee’s record against the dollar. Investor linking concerns, US President Donald Trump Recently announced a fresh tariff on trade partners, promoting a potential trade warfare that could slow down global economic growth and highlight inflation.

Mid-Caps Underprop Nifty in 2025

The mid-cap segment has reduced the broad market significantly so far in 2025. Nifty midcap The index has exceeded 12 percent compared to a decline of 2.5 percent in the benchmark Nifty Index during this period.

The sale has become particularly serious in this month, the Nifty Midcap index fell by 6 percent to 6 percent in January 2025 to fall by 6 percent. In contrast, the Nifty is 2 percent less in February so far. January.

Experts had earlier warned that comprehensive market assessments were reaching unstable levels, leading to a recession. Now, many analysts are recommending caution and a change towards large-cap stocks.

“Unlike 2024, when returns were largely front-loaded, 2025 is expected to see a reverse trend, with high volatility and returns back in the first half. With another narrowness of width, there is a possibility of market consolidation in the near period. Flexible business models, earning visibility, and strong management stock premium valuations will continue to command, ”Neeraj Chadawar, Head – Fundamental and Quantitative Research, Axis Securities said.

Mid-caps vs Large-CAP: Where to invest?

with Mid-cap stock Facing continuous sales pressure, market participants are assessing whether there is a possibility of recovery at the end of this year or if focusing on large-cap shares is a more prudent approach.

According to Devash Vyakal, the head of Prime Research in HDFC Securities, investors should adopt a selective approach, emphasizing large-cap shares, which is expected to give better risk-appropriate returns than the middle and small-cap indicators. He attributes it to an increase in strong income and more attractive evaluation in large-cap space.

VK Vijaykumar, Chief Investment Strategist, Geogit Financial Services highlighted the ongoing trend of large-cap shares that improve the middle and small-cap stocks, expecting this deviation to continue.

The analyst stated that continuous sales by foreign institutional investors (FIIs) have brought large-cap valuations at more appropriate levels, while middle and small-cap stocks are expensive.

Vijaykumar further suggested that investors focus on quality large-cap shares in banking, IT, autos, pharma and capital goods, as they are likely to attract FII flows once a change in emotion.

Mid-cap shares perform in 2025

In the Nifty Midcap 100 index, only 13 shares have given positive returns in 2025 so far, while the remaining 87 records losses.

Top mid-cap loser

Kalyan Jewelers, with a decline of 33 per cent, is the largest losing from mid-cap pack, followed by Godrej Properties, Polycab India, Oberoi Realty, Oracle, Voltas, PB Fintech and Paytm 25 per cent or more.

JSW Infrastructure, TI India, Prestige Estates, Mangalore Refinery and Apollo Tires are other top mid-cap, which shed more than 20 percent.

Top mid-cap beneficial

On the other hand, SRF and UPL have emerged as top beneficiaries in the middle location, growing by 20 percent.

Vodafone Idea, SBI Cards, M & M Finance, Sundaram Finance, L&T Finance, AU Small Finance Bank, Muthoot Finance, NYKAA, Indus Towers, India Dynamics and Patanjali foods are doing positive trade based on year-on-year.

Disclaimer: The views and recommendations made above are of individual analysts or broking companies, not Mint. We recommend investors to investigate with certified experts before taking any investment decisions.