Rewind: Over 80 smallcap stocks earned multibagger tag in FY17; What’s in store for FY18?
NEW DELHI: The BSE Smallcap index produced as many as 86 multibaggers in financial year 2016-17 despite major obstructions in the form of UK’s referendum to leave the European Union followed by note ban in November and fears of rate hikes by the US Federal Reserve.
Among over 775 stocks in the index, 86 stocks surged over 100 per cent, 167 advanced 50-100 per cent and 312 stocks advanced up to 50 per cent. Rest of the stocks gave negative return to investors in the past one year.
Metal stocks stood among the top gainers with Tata Metaliks surging 454 per cent during April 1, 2016-March 29, 2017. It was followed by Jindal Stainless Hisar (up 422 per cent), Thirumalai Chemicals (up 360 per cent), Jindal Stainless (up 317 per cent) and Shilpi Cable (up 315 per cent).
After the recent run-up, market experts believe valuations of small and midcap stocks are not looking cheap.
In a chat with ET Now, Sanjeev Prasad, Senior Executive Director & Co-Head, Kotak Institutional Equities said: “If you look at midcap and small cap, the valuations have started to look reasonably on the higher side. People are giving very high multiples for some of the businesses, which may not have any long-term spends. Semi-branded businesses trading at five to seven times book and which I struggle to understand. Why are you paying such high valuations for businesses which really do not have any great fundamental spend?”
Other gainers in the list include Aptech (up 290 per cent), Escorts (up 279 per cent), Indiabulls Ventures (up 267 per cent), Sudarshan Chem (up 265 per cent), Rain Industries (up 252 per cent) and GNFC (up 229.56 per cent).
Phillips Carbon, IG Petrochems, Lumax Industries, Future Lifestyle, and Rushil Decor also surged over 200 per cent during the ongoing financial year till March 29.
The BSE Smallcap index outpaced mid and large cap stocks in the past 12 months. During the year, the BSE Smallcap index advanced 33.43 per cent, whereas the 30-share Sensex and BSE Midcap index gained 16.87 per cent and 30.90 per cent, respectively.
In a recent interview to ET, Vetri Subramaniam, Group President of UTI Mutual Fund said, “From a valuation point of view, the market is not cheap. It is trading in the rich zone and not looking attractive. Midcap and smallcap stocks are pricey compared with largecaps. I would prefer largecaps to smallcaps.”
Among the losers, Toyam Industries declined the most at 91 per cent in FY17. Other major losers include BS Ltd (down 86 per cent), Visagar Polytex (down 83.52 per cent), Global Offshore (down 77 per cent), Tree House down 74.90 per cent) and KSK Energy (down 73.41 per cent).
Among over 775 stocks in the index, 86 stocks surged over 100 per cent, 167 advanced 50-100 per cent and 312 stocks advanced up to 50 per cent. Rest of the stocks gave negative return to investors in the past one year.
Metal stocks stood among the top gainers with Tata Metaliks surging 454 per cent during April 1, 2016-March 29, 2017. It was followed by Jindal Stainless Hisar (up 422 per cent), Thirumalai Chemicals (up 360 per cent), Jindal Stainless (up 317 per cent) and Shilpi Cable (up 315 per cent).
After the recent run-up, market experts believe valuations of small and midcap stocks are not looking cheap.
In a chat with ET Now, Sanjeev Prasad, Senior Executive Director & Co-Head, Kotak Institutional Equities said: “If you look at midcap and small cap, the valuations have started to look reasonably on the higher side. People are giving very high multiples for some of the businesses, which may not have any long-term spends. Semi-branded businesses trading at five to seven times book and which I struggle to understand. Why are you paying such high valuations for businesses which really do not have any great fundamental spend?”
Other gainers in the list include Aptech (up 290 per cent), Escorts (up 279 per cent), Indiabulls Ventures (up 267 per cent), Sudarshan Chem (up 265 per cent), Rain Industries (up 252 per cent) and GNFC (up 229.56 per cent).
Phillips Carbon, IG Petrochems, Lumax Industries, Future Lifestyle, and Rushil Decor also surged over 200 per cent during the ongoing financial year till March 29.
The BSE Smallcap index outpaced mid and large cap stocks in the past 12 months. During the year, the BSE Smallcap index advanced 33.43 per cent, whereas the 30-share Sensex and BSE Midcap index gained 16.87 per cent and 30.90 per cent, respectively.
In a recent interview to ET, Vetri Subramaniam, Group President of UTI Mutual Fund said, “From a valuation point of view, the market is not cheap. It is trading in the rich zone and not looking attractive. Midcap and smallcap stocks are pricey compared with largecaps. I would prefer largecaps to smallcaps.”
Among the losers, Toyam Industries declined the most at 91 per cent in FY17. Other major losers include BS Ltd (down 86 per cent), Visagar Polytex (down 83.52 per cent), Global Offshore (down 77 per cent), Tree House down 74.90 per cent) and KSK Energy (down 73.41 per cent).
