10 mid-caps that will make you laugh all the way to the bank

As macroeconomic fundamentals improve, equity markets are going to witness better times. Concerns over current account deficit (CAD), inflation, and economic growth have started easing, according to a report from Angel Broking.

CAD will be lower as commodity prices have undergone correction, inflation has started moderating, and government reforms are likely to boost the economy.

"We believe that the Sensex is likely to make new highs in the coming months on the back of this improving domestic outlook and strong global liquidity flows," notes the Angel Broking report.

Until now, defensive stocks primarily drove the market rally but if Sensex starts making new highs mid-cap companies would come back in favour.

Here's a list of 10 companies can give investors best returns in the next rally, according to Angel Broking.

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Bajaj Electricals

The company is expected to capitalise on the growing disposable income in rural areas.

Industry: Household Appliances

Current market price: Rs 163.50

Target price: Rs 237

...

DB Corp

One of India's leading publishing houses, the company is expected to see an increase in revenues as advertising spends rise.

Industry: Publishing

Current market price: Rs 263

Target price: Rs 290

...

Finolex Cables

With some strategic business changes (reducing copper rods sale and end of derivative contracts), the company's bottomline is expected to improve significantly.

Industry: Electrical equipment

Current market price: Rs 53.85

Target price: Rs 68

...

Goodyear India

The company has tie-up with high-end brands such as Audi, BMW, Land Rover, Mitsubishi and Porsche. This gave the company a 65.1 per cent return on invested capital (ROIC), more than double of other listed peers.

The pick-up in farm equipment business, too, is expected to benefit the company.

Industry: Auto tyres and rubber products

Current market price: Rs 265.65

Target price: Rs 345

...

Indoco Remedies

The company's focus on domestic formulations, scaling up exports, and manufacturing partnership with major pharma companies is expected to help the company grow better.

Industry: Pharmaceuticals

Current market price: Rs 61.90

Target price: Rs 89

...

IL&FS Transportation Networks

The company has the portfolio of build-operate-transfer projects.Experienced management should be able to leverage on the growing opportunities in the BOT space.

Industry: Roads and highways

Current market price: Rs 176.40

Target price: Rs 230

...

Mahindra Lifespaces

The company has smartly diversified its projects in different geographies and would benefit as they launch these. Also, it has a strong balancesheet and low high debts on its books.

Industry: Real estate

Current market price: Rs 411.40

Target price: Rs 476

...

Relaxo Footwear

Store expansion and brand revamp is expected to drive business.

Industry: Foortwear

Current market price: Rs 648.70

Target price: Rs 791

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Tech Mahindra

Once court allows it to merge with Mahindra Satyam, the new entity will be the fifth largest IT company in the country. The company is expected to benefit from the scale of operations post merger.

Industry: IT consulting and software

Current market price: Rs 983.85

Target price: Rs 1,170

...

United Phosphorus

In the next 2 - 3 years $7 billion worth of agro products are going off patent, which is a growth opportunity for generic players such as United Phosphorous.

Industry: Agrochemicals

Current market price: Rs 154.80

Target price: Rs 232