2 mid caps that doubled every 4 years and still remain cheap

Summary: A Rs 1 lakh investment in these two mid caps a decade ago would have turned into over Rs 6 lakh today as they multiplied investor wealth by 6-9 times. And yet their valuations remain surprisingly low. Find the names that passed our twin test of growth and value below.

In a market where mid-cap stocks have been running hot with searing valuations, finding stocks that have a stellar track record of compounding investor wealth and yet continue to trade at comfortable levels is rare. But our latest screen threw up two such quiet compounders.

Using Value Research Stock Screener, we scanned the mid-cap universe for companies:

• That have delivered at least 20 per cent annualised returns in the last 10 years
• Have a Valuation Score of seven or above—a sign that they remain reasonably priced despite their past outperformance.

The result? Just two names made the cut.

Both mid-sized players have grown investor wealth by 6–9 times in the last decade with steady earnings growth and healthy return ratios. Yet their current P/E multiples, around 7x and 10x, remain close to their five-year averages, not inflated by the bull-market froth seen elsewhere.

Here are the two mid caps that passed the test.

1) Chambal Fertilisers & Chemicals

Chambal Fertilisers & Chemicals is India’s leading private urea producer, accounting for about 13 per cent of the country’s output through its three high-utilisation plants in Rajasthan that have a total installed capacity of 3.4 million tonnes. These units supply a major share of urea consumed across key agri states. Supported by a strong distribution network across northern states, the company has maintained healthy profitability with a five-year average return on equity (ROE) of 24 per cent and return on capital employed (ROCE) of 22 per cent. Its steady earnings per share EPS growth and balanced trading-manufacturing mix underscore its operational resilience.

2) National Aluminium Company

National Aluminium Company (NALCO) is a rare self-reliant metals producer — mining its own bauxite, refining it into alumina, and turning that into aluminium powered by captive coal and energy assets. Aluminium brings in nearly three-fourths of its revenue, with operations running near full capacity. After a phase of strong earnings growth, NALCO is now investing Rs 30,000 crore to expand refining and smelting capacity, laying the ground for its next growth leg.

The two companies not only stand out for their long-term share price performance and reasonable valuations but also for their overall strength across Value Research’s rating parameters. Both score high on Quality and Valuation, signalling robust fundamentals backed by prudent capital allocation and balance sheet strength.

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Also read: 2 mid caps whose revenues soared 13x and 123x in 5 years