Latest news with #NiftySmallcap250
Economic Times
3 days ago
- Business
- Economic Times
Smallcap mania is back. But do Q4 earnings really justify the multibagger hype?
A blistering rally in smallcap stocks is reigniting investor dreams of overnight riches but the numbers are telling a far more complicated story. With the BSE Smallcap Index up nearly 10% in one month, retail participation is surging, echoing the speculative fervor of the last bull market that climaxed in September 2024. And the excitement isn't just index-level: in the last one month, a staggering 69 smallcap stocks have delivered over 30% returns. Among the biggest gainers, Suven Life Sciences surged 83%, while GRSE, Timex, IFCI, Nelcast, and HLE Glascoat all rallied at least 50%. ADVERTISEMENT But while prices soar, fundamentals remain shaky and earnings aren't keeping pace with the hype. 'Indian smallcaps and midcaps seem to have outperformed largecaps in Q4 FY25, but the numbers tell a different story,' said Akshay Badjate, Fund Manager at Merisis PMS. 'Our analysis of the top 750 listed companies shows smallcaps lagging in profit growth, with a median PBT growth of just 4% compared to 11% for the top 250 largecaps. Many smallcaps even posted flat or negative growth, undermining the narrative of a broad-based rally.' Despite the tepid performance on the bottom line, investor appetite has remained insatiable. The Nifty Smallcap 250 has rallied 9% in the last two months, triple the 3% rise seen in the Nifty 50. Badjate attributes this surge to 'liquidity, retail enthusiasm, and domestic growth optimism,' but warns that the disconnect between price and performance may not be sustainable.'Our view at Merisis Advisors is cautious,' he said. 'While select smallcaps with strong fundamentals remain appealing, the segment risks a correction if earnings don't align with valuations. We're trimming smallcap exposure and leaning into largecaps and large midcaps, where we see better operational momentum and value.' Also read | Rs 7 lakh crore boom in just 10 days! Is the smallcap stocks party getting out of hand? ADVERTISEMENT Q4 did deliver a few bright spots for the broader market. 'The Nifty Midcap 150 reported 15% YoY profit growth and the Smallcap 250 delivered 12%. Margin performance was largely stable in midcaps, though smallcaps saw some pressure,' said Krishna Appala, Fund Manager at Capitalmind Appala also flagged that the earnings catch-up story has its limits. 'Valuations remain stretched — midcaps trade at 34x and smallcaps at 32x trailing earnings, well above the 22x seen in largecaps. The divergence between earnings and valuations in the broader market calls for greater selectivity.' ADVERTISEMENT He further added that while largecaps may appear sluggish, they now offer a better risk-reward profile. 'Despite the sharp upmove recently, largecaps currently offer a better balance of earnings visibility and valuation comfort on a forward-looking basis. The environment today rewards fundamentals and discipline over broad-based exposure — especially when mid and smallcap multiples leave little room for error.'Still, not all fund managers are ready to write off smallcaps just yet. Vaibhav Chugh, Director and Head of Sales at Whiteoak Capital AMC, sees rich opportunity in the chaos — provided investors pick wisely. ADVERTISEMENT 'Yes, the result season started slow but as it progressed, midcaps and smallcaps have surprised on growth trajectory as well as upgrades to downgrades statistics,' Chugh said. 'We continue to be overweight small caps. We find relatively high alpha opportunities due to the heterogeneity of business models, sectors and sub-sectors in the smallcap space — which is the ideal setup for bottom-up stock pickers.' With nearly 70 smallcap names delivering eye-popping returns in a matter of weeks, the lure of the next multibagger is proving hard to resist. But experts caution that investors need to tread carefully — the fundamentals are not as broad-based as the rally suggests, and elevated valuations leave little room for disappointment. The smallcap story is far from over, but chasing momentum without earnings to back it could lead to painful lessons. Also read | Sensex soars 10,000 points from April lows. But India Inc's Q4 numbers expose cracks in market rally (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
3 days ago
- Business
- Time of India
Smallcap mania is back. But do Q4 earnings really justify the multibagger hype?
A smallcap rally is exciting investors, with the BSE Smallcap Index rising nearly 10% in a month and many stocks delivering over 30% returns. However, earnings growth lags behind, with smallcaps showing lower profit growth compared to largecaps. Experts advise caution, suggesting a focus on fundamentals and a potential shift towards largecaps due to stretched valuations in the smallcap segment. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads A blistering rally in smallcap stocks is reigniting investor dreams of overnight riches but the numbers are telling a far more complicated story. With the BSE Smallcap Index up nearly 10% in one month, retail participation is surging, echoing the speculative fervor of the last bull market that climaxed in September 2024. And the excitement isn't just index-level: in the last one month, a staggering 69 smallcap stocks have delivered over 30% returns. Among the biggest gainers, Suven Life Sciences surged 83%, while GRSE Nelcast , and HLE Glascoat all rallied at least 50%.But while prices soar, fundamentals remain shaky and earnings aren't keeping pace with the hype.'Indian smallcaps and midcaps seem to have outperformed largecaps in Q4 FY25, but the numbers tell a different story,' said Akshay Badjate, Fund Manager at Merisis PMS. 'Our analysis of the top 750 listed companies shows smallcaps lagging in profit growth, with a median PBT growth of just 4% compared to 11% for the top 250 largecaps. Many smallcaps even posted flat or negative growth, undermining the narrative of a broad-based rally.'Despite the tepid performance on the bottom line, investor appetite has remained insatiable. The Nifty Smallcap 250 has rallied 9% in the last two months, triple the 3% rise seen in the Nifty 50. Badjate attributes this surge to 'liquidity, retail enthusiasm, and domestic growth optimism,' but warns that the disconnect between price and performance may not be sustainable.'Our view at Merisis Advisors is cautious,' he said. 'While select smallcaps with strong fundamentals remain appealing, the segment risks a correction if earnings don't align with valuations. We're trimming smallcap exposure and leaning into largecaps and large midcaps, where we see better operational momentum and value.'Q4 did deliver a few bright spots for the broader market. 'The Nifty Midcap 150 reported 15% YoY profit growth and the Smallcap 250 delivered 12%. Margin performance was largely stable in midcaps, though smallcaps saw some pressure,' said Krishna Appala, Fund Manager at Capitalmind Appala also flagged that the earnings catch-up story has its limits. 'Valuations remain stretched — midcaps trade at 34x and smallcaps at 32x trailing earnings, well above the 22x seen in largecaps. The divergence between earnings and valuations in the broader market calls for greater selectivity.'He further added that while largecaps may appear sluggish, they now offer a better risk-reward profile. 'Despite the sharp upmove recently, largecaps currently offer a better balance of earnings visibility and valuation comfort on a forward-looking basis. The environment today rewards fundamentals and discipline over broad-based exposure — especially when mid and smallcap multiples leave little room for error.'Still, not all fund managers are ready to write off smallcaps just yet. Vaibhav Chugh, Director and Head of Sales at Whiteoak Capital AMC, sees rich opportunity in the chaos — provided investors pick wisely.'Yes, the result season started slow but as it progressed, midcaps and smallcaps have surprised on growth trajectory as well as upgrades to downgrades statistics,' Chugh said. 'We continue to be overweight small caps. We find relatively high alpha opportunities due to the heterogeneity of business models, sectors and sub-sectors in the smallcap space — which is the ideal setup for bottom-up stock pickers.'With nearly 70 smallcap names delivering eye-popping returns in a matter of weeks, the lure of the next multibagger is proving hard to resist. But experts caution that investors need to tread carefully — the fundamentals are not as broad-based as the rally suggests, and elevated valuations leave little room for disappointment. The smallcap story is far from over, but chasing momentum without earnings to back it could lead to painful lessons.: 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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Business Standard
6 days ago
- Business
- Business Standard
5 stocks to bet on as Nifty Smallcap reaches 200-DMA; check full list here
Technical outlook on smallcap stocks - Anand Rathi, Suven Life Sciences, Pfizer, Clean Science and Jindal Saw seem to be favourably placed, and can potentially gain up to 19% from here on. Rex Cano Mumbai Listen to This Article The NSE Nifty Smallcap 250 index was seen testing resistance around its 200-Day Moving Average (200-DMA) for the second time in as many weeks. The Nifty Smallcap 250 index touched an intra-day high of 16,694 on Monday as against its 200-DMA, placed at 16,720 levels. The index had retraced partly from the day's high, but still held above the 16,600 levels. Technical chart shows the presence of multiple hurdles around the 16,700 - 17,000 range for the Nifty Smallcap index. Breakout and sustained trade above this resistance zone can trigger a potential rally towards 18,200 levels, hint
Economic Times
20-05-2025
- Business
- Economic Times
Smallcaps vs Largecaps: As markets recover, which is the better investment bet currently?
Small-cap stocks are known for their potential to deliver high returns, especially during market recoveries whereas largecaps offer stability and are less volatile, making them appealing to conservative investors. Smallcap stocks have recently outperformed largecaps, sparking debate among investors. While smallcaps offer high growth potential but come with increased risk, largecaps provide stability with potentially lower returns. Experts suggest a diversified approach, considering individual risk tolerance and investment goals, as large caps are better positioned for investment in the current cycle. Tired of too many ads? Remove Ads Smallcaps vs largecaps Tired of too many ads? Remove Ads Which is a better investment currently? In the recent market rally, smallcap stocks have outperformed their large-cap counterparts, drawing significant investor interest. The BSE SmallCap index surged by 9% last week, while the BSE MidCap index gained 7%, both outpacing the Sensex and Nifty 50, which rose by 4.2%. This trend has led to a debate among investors about the merits of smallcap versus largecap investments in the current stocks are known for their potential to deliver high returns, especially during market recoveries. However, this potential comes with increased volatility and risk. The Nifty Smallcap 250 index currently has a price-to-earnings (P/E) ratio of 32.2, indicating that valuations are on the higher Parakh, CEO of Bigul, notes that small caps are attractively valued and poised for earnings growth, making them suitable for investors with a medium- to long-term horizon and a higher risk tolerance Chakrivardhan Kuppala, co-founder of Prime Wealth Finserv, adds that many small-cap companies are still trading 35–40% below their previous highs, suggesting room for convention suggests that largecaps offer stability and are less volatile, making them appealing to conservative investors. They have shown improved earnings compared to the past two quarters, and there has been a revival in foreign institutional investor (FII) interest, particularly in sectors like banking, infrastructure, healthcare, and the current market dynamics, a diversified investment approach that includes both smallcap and largecap stocks can help balance risk and return, experts should consider their risk tolerance, investment horizon, and financial goals when making investment decisions. While smallcaps offer higher growth potential, they come with increased volatility. Largecaps provide stability and steady returns but may offer lower growth prospects in the short Gupta, Director at SKG Investment and Advisory, believes that large caps are better positioned for investment in the current cycle, offering steady returns with lower risk.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Time of India
20-05-2025
- Business
- Time of India
Smallcaps vs Largecaps: As markets recover, which is the better investment bet currently?
In the recent market rally, smallcap stocks have outperformed their large-cap counterparts, drawing significant investor interest. The BSE SmallCap index surged by 9% last week, while the BSE MidCap index gained 7%, both outpacing the Sensex and Nifty 50, which rose by 4.2%. This trend has led to a debate among investors about the merits of smallcap versus largecap investments in the current market. Smallcaps vs largecaps Small-cap stocks are known for their potential to deliver high returns, especially during market recoveries. However, this potential comes with increased volatility and risk. The Nifty Smallcap 250 index currently has a price-to-earnings (P/E) ratio of 32.2, indicating that valuations are on the higher side. Atul Parakh, CEO of Bigul, notes that small caps are attractively valued and poised for earnings growth, making them suitable for investors with a medium- to long-term horizon and a higher risk tolerance . Chakrivardhan Kuppala, co-founder of Prime Wealth Finserv, adds that many small-cap companies are still trading 35–40% below their previous highs, suggesting room for growth. Meanwhile, convention suggests that largecaps offer stability and are less volatile, making them appealing to conservative investors. They have shown improved earnings compared to the past two quarters, and there has been a revival in foreign institutional investor (FII) interest, particularly in sectors like banking, infrastructure, healthcare, and power. Which is a better investment currently? Given the current market dynamics, a diversified investment approach that includes both smallcap and largecap stocks can help balance risk and return, experts say. Investors should consider their risk tolerance, investment horizon, and financial goals when making investment decisions. While smallcaps offer higher growth potential, they come with increased volatility. Largecaps provide stability and steady returns but may offer lower growth prospects in the short term. Kush Gupta, Director at SKG Investment and Advisory, believes that large caps are better positioned for investment in the current cycle, offering steady returns with lower risk.
