As bears grip Sensex, bulls ride on smallcaps; 61 stocks give double-digit weekly returns

It was a somewhat muted week for benchmark indices as concerns surrounding the Adani Group kept investors on tenterhooks. However, the broader market bucked the trend and as much as 61 smallcap stocks gave double-digit returns.

The S&P BSE Midcap index gained nearly 2% in the week gone by, whereas the Sensex ended 0.3% down.

Thermax, NIIT, Zensar Technologies, Equitas Small Finance Bank, Wonderla Holidays, Balaji Telefilms, Muthoot Capital Services, D-Link India, and Pennar Industries gained over 11-24% last week.


At least 10 stocks in the smallcap segment tested their 52-week highs last week. These include KPIT Technologies, Cigniti Technologies, Mrs. Bectors Food Specialities, RACL Geartech, Action Construction Equipment, Chaman Lal Setia Exports, Apar Industries, Muthoot Capital Services, Safari Industries, and Rane Madras.


Many of these stocks have seen a good run in the week gone by on the back of their robust earnings.

While electrical equipment maker Thermax reported a 59% year-on-year rise in net profit for the December quarter, Wonderla Holidays saw its bottom line surge nearly 9 times from the year-ago period.

Similarly, Equitas Small Finance Bank reported 57% growth in net profit for the third quarter on the back of a 20% rise in net interest income, whereas Muthoot Capital Services reported an over 4-fold rise in net profit.

Automobile ancillary maker Rane Madras saw its net profit surge 300%, on the back of 28% growth in sales. Exports grew 68%, while sales to Indian aftermarket customers bounced back with a growth of 12%.

What should investors do?
Analysts remain broadly positive on the capital goods space as higher spending by the government will drive orders and boost revenue visibility for the companies in this sector.

Most analysts recommend holding shares of Thermax in the portfolio, according to Trendlyne data. Equitas Small Finance Bank is a buy for a majority of analysts. According to Trendlyne, of the 12 brokerage firms covering the bank, 10 have a “strong buy” recommendation on the stock.

“With uncertainties related to the merger, management transition and asset quality behind, and higher growth and profitability improvement becoming more visible, bank’s valuation should re-rate..,” YES Securities said in its report.

(Data inputs from Ritesh Presswala)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)