The mid and small-cap indices have remained muted so far in the calendar year 2019 (CY19). While the S&P BSE Sensex and the Nifty50 have gained 7 per cent each during the period, the mid-cap index on the BSE has slipped 2 per cent. The S&P BSE Small-cap index, on the other hand, has lost nearly a per cent.
Despite the mixed performance of the mid-and small-cap indices, 186 stocks that comprise these indices have given a double-digit return in CY19. Shipping firm Seamec tops the list with 135 per cent gain, followed by Jammu & Kashmir Bank (61 per cent), Alankit (56 per cent) Astrazeneca Pharma India (56 per cent) and PC Jeweller (54 per cent).
The rally in Seamec, a leading provider of Diving Support Vessel (DSV)-based diving services comes on the back of a strong set of numbers for the December 2018 quarter (Q3FY19). The company reported a turnaround performance in Q3FY19 with a net profit at Rs 35.87 crore, as against a net loss of Rs 8.03 crore in the corresponding quarter in 2017.
Other stocks that have given attractive returns in the four-month period include Neuland Laboratories, Vipul, SpiceJet, Dilip Buildcon and Adani Gas. These stocks have surged in the range of 52 to 45 per cent. A number of sugar companies feature in the list of wealth creators. For instance, Balrampur Chini Mills has given 43 per cent returns, Uttam Sugar Mills (41 per cent), Dhampur Sugar Mills (up 40 per cent) and Triveni Engineering & Industries (up 38 per cent).
Over the past few months, SpiceJet has rallied at the bourses, boosted further by the temporary shutdown of Jet Airways' operations last week.
The stock has surged 47 per cent thus far in CY19 with a bulk of these gains coming in the April 2019 alone.
The road ahead
Of late, a number of analysts have turned bullish on the mid and small-cap space saying the valuations have become attractive after steep correction last year. "The year of FY20 will belong to mid and small-caps, for having handled-well the last period of slow businesses, tight liquidity and SEBI norms, which impacted the valuation and growth of such classes. These are likely to bear a brighter period in FY20," said Vinod Nair, head of research at Geojit Financial Services.
That said, analysts do remain cautious on the overall market sentiment from a near-term perspective given the sharp rise in crude oil prices and the election uncertainty. Both these factors, they believe have the potential to derail the overall positive market sentiment. Hence, investors should remain cautious and cognizant of the risks before they invest.
"We expect markets to continue to remain volatile in the near term given the earnings outcome and central election progress. On the global front, crude oil is trading at 2019 highs after US announcement of ending all Iran sanction waivers by May thereby putting pressure on importers. India is one of the key importers of Iranian oil and hence the developments on the sanction waiver would be closely monitored along with currency movement. We believe that any correction in quality large / mid cap companies with strong growth prospects should be considered as a good buying opportunity for long term investors," said Jayant Manglik, President - Retail Distribution, Religare Broking.
Company Name CMP as Apr 25, 2019 CMP as Dec 31, 2018 % change
Seamec Ltd. 472.95 201.00 135.30
The Jammu & Kashmir Bank Ltd. 60.65 37.70 60.88
Alankit Ltd. 37.80 24.20 56.20
Astrazeneca Pharma India Ltd. 2262.85 1451.95 55.85
PC Jeweller Ltd. 132.30 86.15 53.57
Neuland Laboratories Ltd. 696.55 459.00 51.75
Vipul Ltd. 48.00 32.35 48.38
Spicejet Ltd. 131.50 89.20 47.42
Dilip Buildcon Ltd. 606.70 417.45 45.33
Adani Gas Ltd. 146.30 100.85 45.07
SOURCE: ACE Equity
Despite the mixed performance of the mid-and small-cap indices, 186 stocks that comprise these indices have given a double-digit return in CY19. Shipping firm Seamec tops the list with 135 per cent gain, followed by Jammu & Kashmir Bank (61 per cent), Alankit (56 per cent) Astrazeneca Pharma India (56 per cent) and PC Jeweller (54 per cent).
The rally in Seamec, a leading provider of Diving Support Vessel (DSV)-based diving services comes on the back of a strong set of numbers for the December 2018 quarter (Q3FY19). The company reported a turnaround performance in Q3FY19 with a net profit at Rs 35.87 crore, as against a net loss of Rs 8.03 crore in the corresponding quarter in 2017.
Other stocks that have given attractive returns in the four-month period include Neuland Laboratories, Vipul, SpiceJet, Dilip Buildcon and Adani Gas. These stocks have surged in the range of 52 to 45 per cent. A number of sugar companies feature in the list of wealth creators. For instance, Balrampur Chini Mills has given 43 per cent returns, Uttam Sugar Mills (41 per cent), Dhampur Sugar Mills (up 40 per cent) and Triveni Engineering & Industries (up 38 per cent).
Over the past few months, SpiceJet has rallied at the bourses, boosted further by the temporary shutdown of Jet Airways' operations last week.
The stock has surged 47 per cent thus far in CY19 with a bulk of these gains coming in the April 2019 alone.
The road ahead
Of late, a number of analysts have turned bullish on the mid and small-cap space saying the valuations have become attractive after steep correction last year. "The year of FY20 will belong to mid and small-caps, for having handled-well the last period of slow businesses, tight liquidity and SEBI norms, which impacted the valuation and growth of such classes. These are likely to bear a brighter period in FY20," said Vinod Nair, head of research at Geojit Financial Services.
That said, analysts do remain cautious on the overall market sentiment from a near-term perspective given the sharp rise in crude oil prices and the election uncertainty. Both these factors, they believe have the potential to derail the overall positive market sentiment. Hence, investors should remain cautious and cognizant of the risks before they invest.
"We expect markets to continue to remain volatile in the near term given the earnings outcome and central election progress. On the global front, crude oil is trading at 2019 highs after US announcement of ending all Iran sanction waivers by May thereby putting pressure on importers. India is one of the key importers of Iranian oil and hence the developments on the sanction waiver would be closely monitored along with currency movement. We believe that any correction in quality large / mid cap companies with strong growth prospects should be considered as a good buying opportunity for long term investors," said Jayant Manglik, President - Retail Distribution, Religare Broking.
Company Name CMP as Apr 25, 2019 CMP as Dec 31, 2018 % change
Seamec Ltd. 472.95 201.00 135.30
The Jammu & Kashmir Bank Ltd. 60.65 37.70 60.88
Alankit Ltd. 37.80 24.20 56.20
Astrazeneca Pharma India Ltd. 2262.85 1451.95 55.85
PC Jeweller Ltd. 132.30 86.15 53.57
Neuland Laboratories Ltd. 696.55 459.00 51.75
Vipul Ltd. 48.00 32.35 48.38
Spicejet Ltd. 131.50 89.20 47.42
Dilip Buildcon Ltd. 606.70 417.45 45.33
Adani Gas Ltd. 146.30 100.85 45.07
SOURCE: ACE Equity
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