Brokerages Are Most Confident About These Five Small-Cap Stocks

The small caps faced the worst rout in seven years in 2018. Still, analysts are bullish on some of the stocks from the category.

Of the 255 Indian companies tracked by at least 10 analysts, only Redington (India) Ltd., PNC Infratech Ltd., Ashoka Buildcon Ltd., Music Broadcast Ltd. and KEI Industries Ltd. have a 100 percent ‘Buy’. Also, analysts expect these stocks to gain more than 20 percent this year, according to Bloomberg data. The stocks selected are classified as small caps as per Securities and Exchange Board of India’s guidelines.

The markets remained volatile last year on account of mutual fund reclassification, higher oil prices, escalating trade tensions between the U.S. and China, weaker rupee and liquidity crisis among non-bank lenders. That led to a nearly 23 percent fall in the BSE SmallCap 100 Index—its worst yearly return since 2011 when it fell nearly 36.5 percent.

Here are the reasons why analysts are most bullish on these five small caps:

The reasons have been compiled from the research reports by brokerages, including Elara Capital, Edelweiss and Anand Rathi.