In the current investment landscape, there has been a noticeable shift in investor sentiment favouring small-cap stocks. This transformation is evidenced by the substantial returns generated by the Nifty Smallcap 100 index.
Small-cap stocks are seen benefiting more from the ongoing recovery in India’s capital expenditure. Defence stocks in particular have witnessed a remarkable surge in their stock prices, propelled by robust order wins, increased budget allocations, and the government's focus on curbing defence imports and encouraging domestic procurement.
Furthermore, the successful landing of Chandrayan-3 has significantly bolstered space-related stocks, capturing the attention and investment of eager investors. Railway-related stocks have also been on an upward trajectory, primarily fueled by strong order wins, driven by the ongoing modernisation of the railway sector.
In addition, renewable energy stocks have also experienced a substantial surge, fueled by India's ambitious energy transition goals, aiming for 500 GW of non-fossil-based electricity capacity by 2030.
In today's trading session, the Nifty Smallcap 100 index hit a record high of 13,002, and this month so far it has surged by 4.6%. It gained 47% from March 2023 lows. Notably, 13 stocks within the index have outperformed significantly, delivering returns ranging from 100% to an impressive 425% over the past year.
Mazagon Dock Shipbuilders, one of the country's leading defence PSUs, led the pack with a return of 425%, moving up from ₹421 to ₹2,212 apiece. The company in its FY23 annual report said that the Indian government has set aside ₹40 billion to implement the scheme over 10 years under the Shipbuilding Policy 2015, which aims to provide financial assistance to shipbuilders and grant infrastructure status to the industry.
Further, the company stated that the Financial Assistance Policy of 2015, coupled with exemption from Customs and Central Excise Duties on all raw materials and parts for use in the manufacture of Ships/Vessels/Tugs, Pusher Crafts, shall reduce the cost of manufacturing ships in India, thus improving the competitiveness of Indian shipbuilders.
Rail Vikas Nigam also achieved substantial gains, boasting a return of 381% in the last one-year period. During this period, the shares have risen from ₹33.85 to ₹162.85.
In FY23, the company completed 863.02 km of project length, including 67.06 km of New Line, 497.88 km of Doubling, 271.12 km of Railway Electrification, and 26.96 km of Metropolitan Transport Project (MTP). In addition, the company carried out railway electrification of 334.59 km as a part of doubling, according to the company's FY23 annual report.
Similarly, Fertilisers and Chemicals Travancore and Jindal Stainless have also delivered massive returns of 304% and 268%, respectively.
Cochin Shipyard shares, on the other hand, spiked from ₹385 apiece to the current price of ₹1,209.45 in the last one-year period, resulting in a stellar rally of 214%. The shares during Friday's trading session registered an all-time high of ₹1,285.
The company said it is in the final phase of completion of work at the International Ship Repair Facility (ISRF) at Willingdon Island, Kochi, which would host a state-of-the-art ship lift system with six independent workstations.
Kalyan Jewellers India, one of India's largest jewellery companies, was next on the list. The shares, which were trading at ₹83 apiece a year ago, have jumped 197% to the present level of ₹246.50.
Just a couple of weeks ago, Kalyan Jewellers inaugurated its 200th showroom globally in Jammu, marking a significant milestone for the brand. The company's presence extends across 22 states and union territories in India, as well as four countries in the Middle East.
Other stocks, including UCO Bank, Suzlon Energy, Bank of Maharashtra, Cyient, KPIT Technologies, Raymond, and Glenmark Pharmaceuticals, have also yielded returns of over 100% within the same one-year period.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie. We advise investors to check with certified experts before making any investment decisions.
