120 mid & smallcap stocks zoomed up to 640% in FY24; will the party in broader markets continue?
In the broader market space, BSE smallcap index has surged about 48 per cent in its 52-week low hit on March 28, 2023, while BSE midcap is up by 42 per cent since the same time from its yearly lows.
- Sep 12, 2023,
- Updated Sep 12, 2023 3:38 PM IST
Domestic equity markets have rallied high as the Nifty50 index scaled the key psychological and much awaited 20,000 mark on Monday. However, this feat by the NSE's barometer briefly eclipsed the strong rally in the broader markets, which scaled new highs along with the benchmark index. In the broader market space, BSE smallcap index has surged about 48 per cent in its 52-week low hit on March 28, 2023, while BSE midcap is up by 42 per cent since the same time from its yearly lows, outperforming the headline index with a big margin. However, the stock specific action has been more surprising, A host of well-known second rung counters have delivered multibagger returns to investors in the current financial year so far. According to the data from Ace Equity, more than 120 stocks from BSE midcap and smallcap index have surged more than 100 per cent since their close on March 31, 2023. The list is topped by Jai Balaji Industries, which has surged more than 640 per cent. The stock settled at Rs 337.45 on Monday, compared to its close at Rs 45.54 on March 31, 2023. It is followed by Jupiter Wagons, which has rallied to Rs 373.95 from Rs 92.10, surging more than 306 per cent. Aurionpro Solutions (up 292 per cent), Texmaco Rail & Engineering (up 276 per cent) and Patel Engineering (up 260 per cent) have delivered stellar returns to the investors. Mazagon Dock Shipbuilders, Force Motors, Genus Power, Indian Railway Finance Corp Titagarh Railsystems, Ddev Plastiks Precision Camshafts, Suzlon Energy have also jumped between 200-250 per cent in FY24 so far. Decoding the factors behind this rally, liquidity gush, improved risk appetite of investors and news flow related to infra, railway and other sectors have pushed the broader market counters to the moon. Even a host of weaker counters have surged in this rally, the experts said. Midcap and smallcap stocks have exhibited an impressive growth streak, and a significant factor behind this trend is the increasing risk appetite among investors driven by improving optimism in the economy and domestic developments, said Shrey Jain, Founder and CEO at SAS Online, a deep discount broker. "A big boost in performance due to active participation from domestic Investors (DIIs) who consistently contributed through SIPs and made substantial lump sum investments in mutual funds. Foreign Investors (FIIs) have also channelled a substantial funds" he added. "For those with a horizon exceeding three years, it makes sense to remain invested in the small-cap equity space." Himadri Speciality Chemical, GE T&D India, Ircon, HBL Power, Parag Milk Foods, RVNL, HPL Electric, Transformers & Rectifiers, TARC, Prakash Industries, Jindal Saw, Thangamayil Jewellery, Garware Hi-Tech Films, Ashapura Minechem, Ramkrishna Forgings, PTC Industries, Cochin Shipyard and Bombay Dyeing have also gained more than 150 per cent in the current year so far. However, analysts continue to remain cautious about the euphoria in the broader markets. They have a word of caution for investors and suggest they be realistic over valuations as they see this as a liquidity-driven rally. They argue that corporate earnings and macroeconomic sentiments will guide the stock specific action. "We see limited points in trying to find fundamental reasons behind the steep increase in stock prices of several midcap and smallcap. stocks," said Kotak Institutional Equities while cautioning investors about the second rung counters. There is no meaningful change in the fundamentals of most companies; in fact, they have worsened in many cases. The primary driver of the rally appears to be irrational exuberance among investors, with high return expectations being driven by the high returns of the past few months, the brokerage added. DB Realty, Zen Tech, Railtel, RattanIndia Power, DCX Systems, Mishra Dhatu Nigam, Kalyan Jewellers, JBM Auto, MMTC, Himatsingka Seide, SJVN, GMR Power, Gabriel India, GMDC, Kaynes Technology, DB Corp, Indian Hume Pipe, Welspun Enterprises, Inox Wind, DCM Shriram, Syrma SGS, Engineers India, Chennai Petro Elecon Engineering, Jammu & Kashmir Bank have also turned multibaggers. "It is a liquidity driven rally due to positive sentiments around India. While markets are aggressive in terms of valuation, midcap and small cap stocks in particular, investors should clearly stay away from noise and make an informed choice. The trajectory for broader markets will depend on corporate earnings, inflation and interest rate," said Srikanth Subramanian, CEO, Kotak Cherry.Disclaimer: Under no circumstances should any person at this platform make trading decisions based solely on the information discussed herein. You should consult a qualified broker or other financial advisor prior to making any actual investment or trading decisions. All information is for educational and informational use only. Business Today does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same.
Also read: L&T, PowerGrid, Jupiter Wagons, HFCL, other stocks to watch on September 12, 2023
Domestic equity markets have rallied high as the Nifty50 index scaled the key psychological and much awaited 20,000 mark on Monday. However, this feat by the NSE's barometer briefly eclipsed the strong rally in the broader markets, which scaled new highs along with the benchmark index. In the broader market space, BSE smallcap index has surged about 48 per cent in its 52-week low hit on March 28, 2023, while BSE midcap is up by 42 per cent since the same time from its yearly lows, outperforming the headline index with a big margin. However, the stock specific action has been more surprising, A host of well-known second rung counters have delivered multibagger returns to investors in the current financial year so far. According to the data from Ace Equity, more than 120 stocks from BSE midcap and smallcap index have surged more than 100 per cent since their close on March 31, 2023. The list is topped by Jai Balaji Industries, which has surged more than 640 per cent. The stock settled at Rs 337.45 on Monday, compared to its close at Rs 45.54 on March 31, 2023. It is followed by Jupiter Wagons, which has rallied to Rs 373.95 from Rs 92.10, surging more than 306 per cent. Aurionpro Solutions (up 292 per cent), Texmaco Rail & Engineering (up 276 per cent) and Patel Engineering (up 260 per cent) have delivered stellar returns to the investors. Mazagon Dock Shipbuilders, Force Motors, Genus Power, Indian Railway Finance Corp Titagarh Railsystems, Ddev Plastiks Precision Camshafts, Suzlon Energy have also jumped between 200-250 per cent in FY24 so far. Decoding the factors behind this rally, liquidity gush, improved risk appetite of investors and news flow related to infra, railway and other sectors have pushed the broader market counters to the moon. Even a host of weaker counters have surged in this rally, the experts said. Midcap and smallcap stocks have exhibited an impressive growth streak, and a significant factor behind this trend is the increasing risk appetite among investors driven by improving optimism in the economy and domestic developments, said Shrey Jain, Founder and CEO at SAS Online, a deep discount broker. "A big boost in performance due to active participation from domestic Investors (DIIs) who consistently contributed through SIPs and made substantial lump sum investments in mutual funds. Foreign Investors (FIIs) have also channelled a substantial funds" he added. "For those with a horizon exceeding three years, it makes sense to remain invested in the small-cap equity space." Himadri Speciality Chemical, GE T&D India, Ircon, HBL Power, Parag Milk Foods, RVNL, HPL Electric, Transformers & Rectifiers, TARC, Prakash Industries, Jindal Saw, Thangamayil Jewellery, Garware Hi-Tech Films, Ashapura Minechem, Ramkrishna Forgings, PTC Industries, Cochin Shipyard and Bombay Dyeing have also gained more than 150 per cent in the current year so far. However, analysts continue to remain cautious about the euphoria in the broader markets. They have a word of caution for investors and suggest they be realistic over valuations as they see this as a liquidity-driven rally. They argue that corporate earnings and macroeconomic sentiments will guide the stock specific action. "We see limited points in trying to find fundamental reasons behind the steep increase in stock prices of several midcap and smallcap. stocks," said Kotak Institutional Equities while cautioning investors about the second rung counters. There is no meaningful change in the fundamentals of most companies; in fact, they have worsened in many cases. The primary driver of the rally appears to be irrational exuberance among investors, with high return expectations being driven by the high returns of the past few months, the brokerage added. DB Realty, Zen Tech, Railtel, RattanIndia Power, DCX Systems, Mishra Dhatu Nigam, Kalyan Jewellers, JBM Auto, MMTC, Himatsingka Seide, SJVN, GMR Power, Gabriel India, GMDC, Kaynes Technology, DB Corp, Indian Hume Pipe, Welspun Enterprises, Inox Wind, DCM Shriram, Syrma SGS, Engineers India, Chennai Petro Elecon Engineering, Jammu & Kashmir Bank have also turned multibaggers. "It is a liquidity driven rally due to positive sentiments around India. While markets are aggressive in terms of valuation, midcap and small cap stocks in particular, investors should clearly stay away from noise and make an informed choice. The trajectory for broader markets will depend on corporate earnings, inflation and interest rate," said Srikanth Subramanian, CEO, Kotak Cherry.Disclaimer: Under no circumstances should any person at this platform make trading decisions based solely on the information discussed herein. You should consult a qualified broker or other financial advisor prior to making any actual investment or trading decisions. All information is for educational and informational use only. Business Today does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same.
Also read: L&T, PowerGrid, Jupiter Wagons, HFCL, other stocks to watch on September 12, 2023