BackFY24 Market Review: Nifty Midcap and Smallcap surged over 60%; check best-performing stocks
The Nifty Smallcap 100 index in FY24 has gained 76.15%, spiking from 8,701 points to 15,327 points. 40 stocks have achieved multibagger status.
PremiumSmall and mid-cap stocks have emerged as favorites among Indian retail investors in FY24. The upward surge in stock prices has significantly enhanced the value of their portfolios. Most stocks in the mid- and small-cap sectors have reached unprecedented highs during FY24, contributing to a notable milestone in market capitalisation.
Amidst this rally, even stocks that had previously remained on the sidelines have participated in the bullish trend, adding to the overall fervor of the market. The retail investor preference for mid- and small-cap stocks isn't a new phenomenon in FY24; it has been ongoing for years.
Also Read: Multibagger Stock: Gravita India gained 992% in 3 years, zoomed nearly 3000% in 4 years
Empirical research indicates that small-cap stocks consistently outperform large-cap stocks, a trend observed across different time frames and regions.
Retail investors have always been on the lookout for a stock that would deliver multibagger returns within a year. The possibility of a large-cap stock generating a multibagger return is quite low due to their already established market positions with high market valuations.
However, when it comes to small and mid-cap stocks, the possibility of achieving multibagger returns is much higher. This is because these companies often operate in dynamic and rapidly growing sectors, allowing for greater potential for growth and appreciation in stock prices.
It's worth noting that large companies can also operate in such sectors. However, the potential for a large-cap stock to deliver multibagger returns within a short period, like a year, is generally lower compared to small and mid-cap stocks.
Also Read: Correction in midcap, smallcap stocks an opportunity: Emkay Global
While some mid-and small-cap stocks benefited from the recent market rally, others experienced gains due to significant order wins amidst the ongoing recovery in India's capital expenditure. Sectors such as defence, railways, renewable energy, and power have all witnessed substantial order wins.
Meanwhile, retail investors have also pumped billions of rupees into mid- and small-cap schemes. In the calendar year 2023, small-cap and mid-cap schemes accounted for 40 percent of the total net inflows into active equity schemes, receiving ₹64,000 crore of total inflows of ₹1.6 trillion.
The substantial influx of funds has garnered regulatory scrutiny, prompting mutual fund houses to conduct stress tests every 15 days. The first test results, released on March 15, revealed that India's leading small-cap fund managers may take from one to 17 days to liquidate a quarter of their portfolios.
Also Read: How India's top 10 mid-cap mutual funds fare on liquidity stress test
Asset managers would likely require a minimum of three days and a maximum of 34 days to exit half of their mid-cap stocks.
Stellar performance
The Nifty Smallcap 100 index in FY24 has gained 76.15%, spiking from 8,701 points to 15,327 points. Over the past 11 months, the index closed positively in 9 months, with November registering the highest monthly gain at 12%. Remarkably, the index maintained an average return of 5% across these nine months.
Also Read: Nifty 50 is expected to deliver 16% earnings growth in 2024-25: Report
The Nifty Midcap 100 index has also jumped sharply, rising by 61.21% in FY24, climbing from 29,775 points to 48,027 points. Similar to the small-cap index, the mid-cap index experienced its most significant monthly gain in November, recording an increase of 10.37%.
Skyrocketing returns
In the Nifty Smallcap 100 category, a significant number of individual stocks have outperformed the index, with 56 stocks recording returns exceeding 76% in FY24. Among these, 40 stocks have achieved multibagger status, with PSUs like HUDCO, MRPL, Cochin Shipyard, and Ircon International leading the pack, boasting returns of 362%, 329%, 323%, and 321%, respectively.
Other notable performers include Titagarh Rail Systems, NBCC, Himadri Speciality Chemical, Tata Investment Corp., Swan Energy, NLC India, Apar Industries, Olectra Greentech, Hindustan Copper, JBM Auto, Jammu & Kashmir Bank, Birlasoft, ITI, Intellect Design Arena, Global Health, Gujarat Mineral Development Corporation, Angel One, Indian Overseas Bank, Central Bank of India, all yielding returns exceeding 150%.
Also Read: History repeats? Is the surge in mid and small-cap stocks similar to that of 2018?
Similarly, in the Nifty Midcap 100 segment, 52 stocks have surpassed the index with returns exceeding 62%, with 28 of them achieving multibagger status. BSE Suzlon Energy, SJVN, Rail Vikas Nigam, Kalyan Jewellers India, and BHEL have emerged as the top performers, with massive returns of 511%, 451%, 300%, 281%, and 251%, respectively.
Other notable gainers include Bharat Heavy Electricals, FACT, Mazagon Dock Shipbuilders, Prestige Estates Projects, Macrotech Developers, Torrent Power, Oracle Financial Services, Dixon Technologies, and Bank of Maharashtra, all boasting returns exceeding 150%.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
3.6 Crore Indians visited in a single day choosing us as India's undisputed platform for General Election Results. Explore the latest updates here!
