Smallcap stock investors hit Rs 26 lakh-crore jackpot in FY24. What's next?
Synopsis
The combined m-cap of BSE Smallcap index of 1,000 stocks has grown by Rs 26 lakh crore to Rs 66 lakh crore now in this financial year. In the process, 252 stocks or every fourth stock in the smallcap index has given multibagger returns.
The rally crossed sectoral boundaries and only 124 stocks have given negative returns this financial year.
Some of the top smallcap gainers in the year are Jai Balaji Industries (1,878%), Waaree Renewable Technologies (810%), Force Motors (522%), Inox Wind (441%), Suzlon Energy (369%) and Kalyan Jewellers (281%). Defence and rail stocks like Ircon International, Jupiter Wagons, RVNL, Cochin Shipyard, Titagarh Railsystems, PTC Industries and Mazagon Dock Shipbuilders also gave multibagger returns.
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Stocks Recommendations
Noting that earnings in mid and smallcaps have recorded a CAGR of 30% and 37% since 2018 vs 16% for largecaps, Anand Rathi said smallcaps are expected to report strong earnings growth in the medium term.
A technical analysis done by Nuvama shows that the current scenario is a corrective phase in the ongoing bull market and has reached an oversold condition at key support levels. While recommending long positions, the brokerage said it appears the price correction phase is over and will likely lead to a bottoming and a resumption of the bull phase.
"The long-term and medium-term trend remains bullish and the current decline has kept the primary trend intact. The emergence of Hammer & Inside candlestick pattern indicates that an intermediate low is in place in the Smallcap100 index," said Nuvama's Manav Chopra.
(Data: Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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