These 12 smallcap stocks surged over 100% in April; will they continue to rally?

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As many as 12 smallcap stocks on the BSE doubled investors’ money in April when the benchmark equity indices cracked over 1%. With a rally of 148%, Tantia Construction emerged as the top gainer on the list. The scrip climbed to Rs 7.59 from Rs 3.06 last month. On the other hand, the 30-share index Sensex declined 1.47% to 48,782.

Sukra Pharmaceutical (up 124%), Vivimed Labs (up 114%), Vijay Solvex (up 112%), RattanIndia Enterprises (up 107%), Bihar Sponge (up 107%), Times Guaranty (up 105%), Gopala Polyplast (up 105%), Bacil Pharma (up 104%), Morepen Labs (up 103%) and Kabsons Industries (up 102%) stood among other major gainers on the exhange.

On the other hand, the broader market outpaced largecaps. The BSE Smallcap index rallied nearly 5% to 21,670, while the BSE Midcap index advanced 0.65% to 20,312.20. Analysts believe that the Indian equity market is likely to stay volatile in the near term.

“We expect volatility to remain high in the coming week too. First, participants will react to the Reliance Industries results which came in after market hours on Friday. Besides, monthly auto sales numbers will also start pouring in from May 1. In the following session, the election results of the five states will also be the focus on May 2. On the economy front, Markit Manufacturing PMI and Markit Services PMI data are scheduled on May 3 and May 5 respectively. Needless to say, updates related to Covid cases, vaccine drive and global cues will also be closely tracked,” said Ajit Mishra, VP research. Religare Broking.

Bal Pharma, (up 98%), Zodiac Ventures (up 97%), Stratmont Industries (up 93%), Nyssa Corporation up 92%) and Garware Synthetics (up 90%) stood among other major gainers on the BSE.

Rusmik Oza, executive vice president, head of fundamental research, Kotak Securities said: “Most of the earnings that are coming are in line with estimates which is already discounted by the market. One can stay cautious and look to have a buy on dips strategy for future investments.”

He further added that more states may extend curbs to controls the virus going ahead. The staggered state-level restrictions and mini-lockdowns this time is having a bigger impact on the services sector and a lesser impact on the manufacturing sector.

“We will certainly see GDP growth estimates and earnings estimates getting cut over the next 2-3 months,” said Oza.

In the largecap space, index heavyweight Reliance Industries and HDFC Bank declined 0.44% and 5.45%, respectively, last month. Tata Consultancy Services and Housing Development Finance Corporation cracked 4.38% and 3.15%, respectively.