In a week when benchmark indices remained highly volatile and ended flat, smallcap stocks outperformed by wide margins amid strong buying by domestic institutional investors. At least 28 smallcap stocks gave up to 35% returns when the Nifty50 and Sensex gained only 0.5% each.
BCL Industries (35%), Sterling Tools (28%), KBC Global (27%),
(25%), Transformers & Rectifiers (22%), (17%), (16%), (16%), Edelweiss Financial Services(16%), , , and are among 28 stocks that have surged about 10-35% in the last week.
In the last week, ahead of the key inflation data in the US and India, benchmark indices remained weak in the early part of the week as investors were cautious.
The data released on Thursday showed that inflation cooled off to a 12-month low of 5.72% in December, which led to hopes that the rate hike cycle of the Reserve Bank of India may not last long. Similarly in the US, consumer price inflation in December fell for the first time since May 2020.
, , , Deep Polymers, , Eureka Forbes, , Lloyds Metals & Energy, and Nelcast also surged over 10% in the week gone by.
In the last week, sectoral indices such as BSE Metal, BSE IT, BSE Power and BSE Capital Goods surged over 2%.
Midcap and smallcap stocks lagged largecap stocks in 2022 amid the volatility in the market. But many market experts see the broader market outperforming in 2023. Mid and smallcap stocks have seen flat to negative returns in 2022, which will reverse this year with interest rates peaking and operating margins revival leading to good earnings growth, said Sushant Bhansali, chief executive officer of Ambit Asset Management.
Among smallcap stocks that are expected to do well in the week ahead is
. “We are witnessing a major range breakout with exceptional volumes since the past three trading sessions. The stock is poised for a faster upside,” said Mehul Kothari, AVP (Technical Research) at Anand Rathi Shares & Stocks.
Kothari recommends buying the stock near Rs 73 for a target of Rs 83 while maintaining a stop loss at Rs 68. On Friday, the stock ended 6% higher at Rs 73.05 on the NSE.
(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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