These 33 mid, smallcap stocks turned the tide this year to rise up to 240%

New Delhi: The first five months of 2022 have not been spectacular for Dalal Street, particularly for second-rung stocks, which have faced the wrath of the investors.

BSE midcap and smallcap indices are down by 9 per cent and 12 per cent, respectively, in the year 2022 so far. On the contrary, the BSE Sensex has dropped little less than 6 per cent during the period.

Despite this underperformance, some of the stocks from the midcap and smallcap segment have turned the tide to deliver handsome returns to the investors.

According to data from Ace Equity, as many as 33 stocks have zoomed more than 50 per cent in 2022 so far. Among these, as many as five counters have delivered multibagger returns to the investors.

The underperformance of small and midcap counters can be attributed to the factors such as Russia Ukraine war, rising crude prices, inflation, and persistent selling by foreign investors.

Palka Arora Chopra, Senior Vice President at mastertrust, said that smallcap and midcap stocks lost significant values over the last few months and it is majorly due to the sharp volatility in the equity market.

Adding more to it, Sunil Damania, Chief Investment officer, MarketsMojo, said that post March 2020, the market has done exceptionally well and mid and small caps outperformed the larger peer.

"After a stupendous rise in the share price, some investors decide to book profits," he added. "We are currently seeing corrections in a big and sustainable rally. These stocks will bounce back in the last quarter of 2022."

The list of outperformers is topped by Adani Power, which has zoomed about 242 per cent between January 1 to May 30. The scrip rallied to Rs 340.75 on May 30 from its close at Rs 99.75 on December 31, 2021.

is another counter which has surged 161 per cent to Rs 268.2 on May 30. The oil refining and marketing had settled at Rs 102.6 in the last session of 2021.

Sharda Cropchem (112 per cent up), (100 per cent up) and (100 per cent up) are the other multibagger counters.
Mitul Shah, Head of Research, Reliance Securities said that companies with strong quarterly performance and which are not impacted by high interest rates and inflation have delivered healthy gains in the past few months.

"Few sectors benefited from commodity cost inflation, '' he added. "We expect these quality midcaps with strong domestic as well as export potential would continue their outperformance over the long term."

Vadilal Industries, Swan Energy, , Bharat Dynamics, Meghmani Finechem and are the other counters which have zoomed between 80-100 per cent.

TCPL Packaging, , Apcotex Industries, JK Paper, Khaitan Chemicals & Fertilizers, and Petrochemicals, Orient Bell, GHCL are other companies which have delivered return more than 65 per cent.
TGV SRACC, Vishnu Chemicals, , Nava Bharat Ventures, Shanthi Gears, Raymond and Uttam Sugar Mills have risen between 55-65 per cent.

Other counters rising more than 50 per cent include , , Andhra Paper, , , and .

The market has become wary over the valuations of mid and smallcap stocks, along with the concerns that have emerged in some commodity stocks, which rose substantially post-March 2020, said Damania from MarketsMojo.
Market experts believe that mid and smallcaps continue to offer an excellent opportunity for investors to make money. However, they take some time to recover and rise again.

"We expect the equity market to remain under pressure over 1HFY23, while it would bounce back strongly in 2HFY23 with likely normalized inflation, commodity cost softening and economic recovery," said Shah from Reliance Securities.

The bull run in the equity markets can not last forever and investors should wait for health corrections to enter the markets. Long term investors should stick with robust fundamentals and do not worry about the short term volatility.

One cannot expect the market to remain bullish always, some consolidation is important as it helps the developed and emerging economies to bring out the lucrativeness via monetary and fiscal policies, said Chopra from mastertrust.

"Long-term investors can invest in companies with concrete fundamentals, and short-term investors can trade the pullback with defined risk management tools and position sizing," she advised.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)