Over the last six months, small-cap IT stocks have emerged as the star performers, delivering robust returns to their investors. These stocks have significantly outperformed their larger counterparts in the same period.
The Nifty IT Index declined by nearly 5.3% in six months. Only four stocks among the Nifty IT Index generated positive returns, out of which only Persistent Systems returned a double-digit growth.
On the other hand, Ten Small Cap IT stocks have seen a rise in their share prices, with some generating returns of up to 150% in the same time frame.
Magellanic Cloud has topped the list, moving from ₹80.25 apiece to ₹200.40 apiece, soaring by almost 150%. It is a small-cap IT stock with a market capitalization of ₹2,340 crore.
The company is engaged in software development, consulting, and human resource business solutions, offering transformational as well as outsourcing services.
On May 12, the company's shares hit a new all-time high of ₹201 per share. In the last two years, the stock has returned 1199%, and in the last three years, it has soared by almost 2575%.
Newgen Software Technologies emerged as the second-top gainer on the list. This small-cap IT stock delivered a fabulous return of 80%, appreciating from ₹338.65 apiece to ₹608.40 apiece.
After hitting its 52-week low of ₹300 apiece in December last year, the stock gained momentum and zoomed 105% in just five months to hit a new 52-week high of ₹616 on May 12.
The company reported robust numbers for the March quarter, beating analysts' estimates. It reposted a 37% YoY jump in its consolidated profit after tax to ₹78.6 crore from ₹57.4 crore in Q4 FY22.
Sonata Software was another IT stock that advanced strongly during the last six months. During this period, the company's shares have climbed from ₹531.65 apiece to their current position of ₹874.90, generating a stunning return of 64.56%.
The stock on April 11 marked a new all-time high of ₹903 apiece. The company is a leading modernization and digital engineering company, headquartered in Bangalore, providing services using its proprietary platformation approach.
Recently, in March, the company signed its largest-ever contract with a total contract value (TCV) of $160 million for ten years with a US-based consumer retail company. Sonata will be managing end-to-end IT modernization and transformation for the client.
| Scrip Name | 6 Month return |
| Magellanic Cloud | 150% |
| Newgen Software Technologies | 80% |
| Saksoft | 66.2% |
| Sonata Software | 64.5% |
| Cyient | 62.7% |
| Nucleus Software Exports | 58.3% |
| Datamatics Global Services | 50% |
| Sonata Software | 49.3% |
| Zen Technologies | 49% |
| KPIT Technologies | 30.6% |
On similar lines, shares of Saksoft also moved steadily over the last six months from ₹115.15 apiece to the last trading price of ₹191.40, giving their shareholders a return of 66.21%. Additionally, the stock has exhibited a substantial growth of over 1318% in the last two years.
After delivering a robust performance in the March quarter, Cyient shares have witnessed a one-way spike, breaking record highs with each day passing.
On April 20, the company reported a better-than-expected consolidated net profit for the March quarter of ₹163.20 crore, an increase of 5.83% YoY and 4.48%. Since then, the stock has zoomed 16.83% in the following 13 trading sessions to reach a record high of ₹1,275 apiece.
From its November low of ₹742.70 apiece, the stock advanced 62.78% to reach the present trading price of ₹1,209. This recent rally has pushed the stock to gain 485% in the last three years.
Meanwhile, shares of Nucleus Software Exports had a tough year in CY22, with their value plummeting by around 32%. However, things took a different turn after the company announced its Q3FY23 results in February.
The December quarter numbers cheered investors, and the stock rallied 40.54% in the same month. The bullish momentum continued in the following month, and the stock surged another 12.55%. Overall, from its November trading price of ₹389.15 apiece, the stock has zoomed 58.35% to date.
Datamatics Global Services shares have witnessed a surge of 40% in the last nine trading sessions, reaching a lifetime high of ₹483 per share on May 12. The company's outstanding performance in the March quarter has been a contributing factor to the significant growth in its stock price.
Furthermore, the stock has delivered returns of over 50% in the last six months due to its recent outstanding performance. The company reported a 29% growth in its consolidated net profit to ₹58 crore in Q4FY23.
Other stocks, including Zen Technologies, Cigniti Technologies, and KPIT Technologies, also delivered significant returns in the range of 30–49% during the last six months.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
