As market fell from peak, these 29 smallcaps defied gravity to deliver up to 118% return

Indian markets have corrected over 10% from their late-September highs, and while there are mixed opinions on the likelihood of a rebound, a select few small-cap stocks have defied the negative trend, delivering impressive returns to investors over the past two months.

Around 29 stocks in the smallcap space gained 25% or more at a time when the BSE smallcap index has fallen nearly 14% from its peak. JSW Holdings saw a multibagger surge of 118%, followed by Nalwa Sons Investments, whose shares rallied 70% during this period.

Some other stocks which shined in the downtrend include Raghav Productivity, Siyaram Silk Mills, Timex Group, Indo Tech Transformers, Pix Transmission, Precision Camshafts, WPIL, Innova Captab, Ganesh Housing Corp, Avalon Technologies, Ganesha Ecosphere, SJS Enterprises and Neuland Labs.


The broader market correction has been influenced by global economic uncertainties, inflationary pressures, and geopolitical tensions, leading to cautious investor sentiment

Analysts said the second quarter results were also weak in the smallcap space with net profit down by 27-30% and management commentary was soft.

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Even in terms of valuations, Vikas Jain, Head of Research at Reliance Securities said the smallcap index is still trading at a premium to long term averages.

"There could be a strong up move in largecaps, while the will take some time witnessing some consolidation and time correction at current levels. One will have to be very selective and follow a bottoms up approach to invest in small cap stocks," Jain said.

The just concluded earning season was disappointing with many companies facing challenges on margins and growth and the rebound in the market will largely depend on the earnings outlook going forward.

Analysts highlighted the potential of select smallcap stocks that have demonstrated consistent earnings growth and possess a competitive edge in their respective industries.

"Investors can start accumulating quality smallcap stocks and wait patiently to reap rich rewards. Although we believe markets can further correct in the near term, we are not far from the bottom. Any signs of cooling food inflation will give boost to the markets," said Atish Matlawala, Sr Analyst - Fundamental, SSJ Finance & Securities.

"Themes we like in the market are Capital market related stocks like BSE Ltd, Angel Broking, CDSL and CAMS. We are also bullish on the digital infrastructure story where we like Protean eGov Technologies," Matlawala added.

With 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)