PTC Industries, Garden Reach among 36 small-cap stocks that jumped up to 45% in March. Do you own any?

Stock market today: After five months of sluggish performance, Indian markets staged a strong rebound in March, with broad-based support across sectors, propelling frontline indices to their best monthly performance since July 2024.

Small-cap stocks, in particular—the major casualties of the recent market meltdown—even showed a strong pullback in this recovery, outperforming mid-caps as well as the Nifty 50 and Sensex.

The Nifty Small-cap 250 index has rebounded 9% in March, outperforming the Nifty 50 index, which has gained 6.3% in the same period. This marks a strong rebound from February's rout when the index crashed 13%, recording its worst monthly drop since the Covid-19 pandemic. Some sectors, such as defence, oil and gas, NBFCs, and metals, have led this revival.

Retail investors, the biggest drivers behind the unprecedented rally in small-cap stocks post-COVID-19, have seen their portfolios bleed over the last five months. Stretched valuations, which failed to align with fundamentals, made them vulnerable to a sharp correction.

As sentiment turned cautious and institutional investors pulled back, small-cap stocks faced relentless selling pressure, wiping out a significant portion of their gains.

However, the recent market rebound in March has rekindled optimism, with many small-cap stocks bouncing back from their lows. While concerns over valuations persist, bargain hunters and long-term investors have started accumulating stocks at lower levels, providing some relief after prolonged pressure. Nevertheless, these stocks will need to maintain the same momentum in the coming months, as the index, despite the rebound, remains in bear market territory.

36 stocks record over 20% gains in March rebound

Overall, 36 stocks from the Nifty Small-cap 250 index recorded gains between 20% and 45% in March, with PTC Industries emerging as the top gainer, rallying 44.6% to reach ₹14,752 per share. This rebound came after the stock lost 28% in February’s sell-off.

JSW Holdings shares have spiked 41.2% in March, taking its year-to-date gains to 49%.

Ending its two-month losing streak, Zen Technologies surged 37% last month, while Godfrey Phillips India extended its winning streak for the second consecutive month, adding 37% in March after a 15% jump in February.

Impressively, RHI Magnesita India gained 35.2%, recovering a significant portion of its 36% decline over a sustained six-month fall. Garden Reach Shipbuilders also recovered most of its seven-month decline, rallying 34% in March.

Other notable stocks, including Chennai Petroleum, HEG, TRIL, Jyoti CNC Automation, NAVA, BEML, AstraZeneca Pharma, and 24 others, ended March with gains ranging between 20% and 34%.

Can the relief rally sustain in April?

According to market experts, the extension of the March rally into the current month will depend on several domestic and global factors. A key determinant will be the reciprocal tariffs expected to be announced by the Donald Trump administration on Wednesday, which could significantly influence market sentiment. Additionally, the upcoming March quarter earnings season, set to begin next week, will provide crucial insights into corporate performance and sectoral trends.

Investors will also keep a close eye on the Reserve Bank of India's (RBI) monetary policy decision, which could impact liquidity and interest rate expectations. Furthermore, key U.S. economic data releases, including inflation figures and job reports, will shape global risk appetite.

Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said, "Can the rally continue, or will there be another downturn? This will depend mainly on what Trump announces in tariffs. If the tariffs are lower than feared, there can be a rally in the market, which will be led by externally linked sectors like pharmaceuticals and IT. On the other hand, if the tariffs are severe, there can be another round of downturn in the market. Investors can wait and watch and respond after the details are known."

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.