Sweet ending to 2022: 264 smallcap stocks give double-digit weekly returns

Many stocks in the smallcap segment ended 2022 on a sweet note, with as much as 264 of them giving double-digit weekly returns.

As much as 27 smallcap stocks rose 20-41% in the week gone by. These include names like

National Fertilizers, V2 Retail Ltd. Rashtriya Chemicals and Fertilizers, GIC Housing Finance,

Poonawalla Fincorp Ltd, Arvind Smartspaces, Suryoday Small Finance Bank, Sharda Cropchem, and Titagarh Wagons, and South Indian Bank, among others.


About 20 stocks in the smallcap segment hit 52-week highs during the week. These include Arvind Smartspaces, Titagarh Wagons, RBL Bank, Kalyan Jewellers, Skipper, Mahindra CIE Automotive, Kirloskar Ferrous Industries, Capri Global Capital, and ICRA among others.

In the run-up to the Union Budget, investors are increasing bets on railway stocks, which were among the best performers in 2022.

Increased investments by the government in rail infrastructure has bolstered the outlook for rail-related companies. Expectations are that the government will make further investment announcements in the budget, which will be the last one before the general elections in 2024.

However, some analysts have voiced concerns over the valuations of some of the public sector stocks.

“Railway PSUs have performed well in recent months but at these levels it is important to carefully consider their valuation, which is not comforting for me,” said Mayank Mehraa, smallcase manager and principal partner at Craving Alpha.

Mehraa is, on the other hand, positive on defence names like Bharat Electronics and Mazagon Dock Shipbuilders and recommends these stocks given the government’s thrust to increase domestic manufacturing of defence equipments.

Besides rail stocks, banks and financial stocks are the other major bets for market experts. With the rising consumption and discretionary spending, credit growth is expected to increase further.

Jefferies India is estimating a 16% growth in loans for non-bank financial and housing finance companies in FY24 due to better activity levels, improved consumer sentiment, strong housing demand and auto sales.

OTHER GAINERS

Fertiliser stocks rose sharply in the last week, on speculation that the government might increase subsidies for urea in the upcoming Budget.

Record high food prices and supply constraints from major exporting countries like China and Russia - in the aftermath of its invasion of Ukraine - have kept fertiliser stocks in the limelight this year.

Meanwhile, shares of Skipper had a stellar run in the last week as the engineering products maker bagged a major contract worth Rs 2,570 crore from Bharat Sanchar Nigam Ltd to supply and install telecom towers for 4G network services in the states of Rajasthan and Odisha.

The stock hit an over 4-year high of Rs 148.90 on Friday on the National Stock Exchange.

(Data inputs from Ritesh Presswala)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)