Multibagger Stocks: Several overlooked small-cap stocks in India have delivered multibagger returns within a short span of 60 days, even though global predictions and market volatility persist. This recovery follows the heavy sell-off witnessed in March, highlighting the resilience and potential of the country’s small companies.
Technologies led with approximately 134 per cent gains, followed closely by MTAR Technologies at nearly 129 per cent, HFCL over 108 per cent, and Nintec Systems more than 111 per cent. Other notable performers include Sigma Advanced Systems, Mrugesh Trading, and United Foodbrands, which also more than doubled.
March Selloff – What we know so far
The Nifty Smallcap 100 index dropped nearly 10 per cent during the March turmoil, triggered by the Iran conflict, spiking crude oil prices and foreign institutional investor outflows. Many of these small-cap stocks had already underperformed benchmarks over the prior year, remaining largely stagnant.
Valuations compressed sharply during the correction, with earnings multiples approaching one-year lows. The subsequent recovery has been fuelled by a combination of factors — improving risk appetite, stabilising crude oil prices, stronger-than-expected quarterly earnings, and renewed selective buying by domestic investors.
Earnings-driven rally, not speculation
Aashish P Somaiyaa, CEO of White Oak Capital Management, attributed the rally to strong fundamentals rather than broad speculation.
“The results in small and midcaps have been strong and have surprised investors,” Somaiyaa told ET Markets.
“It’s more bottom-up selective stock picking wherever the numbers are looking good. But by and large, the numbers for March for small and mid-cap have been better than what people thought.”
He noted that investors who had stepped back from the segment after prolonged weak returns are now returning selectively.
Brokerage views on valuations and risks
Foreign portfolio investors sold a net USD 7.3 billion in Indian equities during April amid geopolitical tensions and a widening trade deficit. Sectors like autos and pharma have recovered well, but banks and several large-caps continue to lag due to persistent FII selling.
Market participants remain wary about the rally’s sustainability. Analysts emphasise that the next phase will hinge on continued earnings delivery, management guidance, and global macro developments rather than mere liquidity-driven momentum.
“Profit-booking cannot be ruled out,” Somaiyaa added.
Retail participation in smaller companies has grown significantly in recent years, which can amplify both upsides and corrections.
(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience consult their financial advisors before making any money-related decisions.)
