32 smallcap stocks give double-digit weekly returns; is more steam left?

The week gone by was positive for the domestic market, with Sensex notching 1% gain. But the broader market remained an outperformer as is evident in the stellar returns given by stocks in the smallcap space.

32 smallcap stocks gave double-digit returns on a week-on-week basis. These include Rail Vikas Nigam, Latent View Analytics, Multi Commodity Exchange of India, Muthoot Capital, South Indian Bank, Infibeam Avenues, and D-Link India.

Rail Vikas Nigam shares got a boost from news that the government is considering selling partial stake in railway companies as part of its disinvestment target.

Banks remained among the preferred picks for investors given the strong improvement in loan books and asset quality.

Although some stocks are seeing profit booking after the recent gains, analysts remain bullish on the sector, and recommend a buy on dips in the pack.

“The banking (index) has taken a pause after the recent run, but soon it is likely to move beyond all-time highs to enter uncharted territory,” said Sameet Chavan, chief technical and derivative analyst at Angel One.

Overall, market experts see smallcap and midcap segments sustaining their outperformance, which will also keep Indian equities in good stead compared to peers.

“As seen in market upcycle, mid and smallcap stocks tend to outperform largecaps. Based on expectation of Nifty 50 creating a new high, we can expect this to translate into broader market outperformance as well..” said Vivek Goel, co-founder and joint MD at Tailwind Financial Services.

LAGGARDS

While the market breadth was largely positive, several stocks in the midcap space succumbed to selling pressure.

Page Industries, Delhivery, Laurus Labs, and Gland Pharma have registered double-digit losses on a week-on-week basis.

Shares of Delhivery have been hit by the general sell-off in new age technology companies worldwide amid concerns of economic slowdown. Besides, expiry of the pre-IPO lock-in period is also nearing, which is already exerting pressure on the stock.

Meanwhile, shares of Gland Pharma hit an all-time low during the week, as the drugmaker reported weak earnings for the September quarter. This has clouded the near-term growth outlook for the company.

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