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Synopsis: In the first five months of FY25, Dalal Street witnessed a significant rally, with 15 microcap and smallcap stocks delivering returns of over 200%. The NSE Nifty index saw a 13% rise, but it was the Nifty Midcap 150 and Nifty Smallcap 250 indices that truly outperformed, with gains of 23% and 27% respectively. LCC Infotech led the pack with a staggering 362% increase, while other notable gainers included V-Marc India, Shekhawati Industries, and PG Electroplast. Analysts suggest that this market phase may continue, but warn of increasing disparities between individual stocks as underlying challenges emerge.
Dalal Street has been buzzing with excitement as several microcap and smallcap stocks have delivered astounding returns in the first five months of FY25. The broader market trends have been positive, with the NSE Nifty index rising by 13% as of August 30, 2024. However, it was the Nifty Midcap 150 and Nifty Smallcap 250 indices that stole the show, surging by 23% and 27% respectively.
Among the top performers, LCC Infotech emerged as a standout, with its stock price skyrocketing by 362% from ?1.90 on March 28, 2024, to ?8.77 on August 30, 2024. This incredible gain was closely followed by V-Marc India and Shekhawati Industries, which saw their shares jump by 333% and 310% respectively.
Enser Communications also delivered impressive returns, with its stock climbing by 278% during the same period. Additionally, companies such as Kody Technolab, Sungarner Energies, Shakti Pumps (India), Transwarranty Finance, and Viviana Power Tech all witnessed gains ranging between 220% and 275%.
PG Electroplast (PGEL), which reported a 216% increase in its share price to ?525.15, has been a particularly interesting case. The company recently secured a Google ODM license and is in the process of developing its own ODM solutions, which are expected to be ready by the second half of FY25. PGEL is currently the only manufacturer of 100-inch TV displays in India and is rapidly gaining market share.
Other notable gainers include Kavveri Telecom Products, Suraj Estate Developers, Windsor Machines, and Trident Techlabs, all of which surged by over 200% during this period. Suraj Estate Developers, in particular, reported a remarkable 107% year-on-year growth in consolidated net profit, reaching ?30.13 crore for the quarter ended June 2024. This performance has led brokerage firm Nuvama to set a target price of ?935 for the company, citing its strong project lineup and leadership in the South Central Mumbai redevelopment segment.
Financial experts, including those from Bernstein, have advised investors to focus on narrow pockets of moderate valuations and thematic growth opportunities, warning that while broad market returns may continue for some time, the disparity between stocks is likely to widen as underlying challenges come to the fore.
Disclaimer: Investing in the stock market involves risks, and past performance is not indicative of future results. It is advisable to consult with a financial advisor before making any investment decisions.
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