Midcap and smallcap share on the path of return – Midcap and Smallcap Stocks Regain Momentum in April Rally

After recovery in the Indian stock market in April, midcap and smallcap stocks have returned again. The midcap index of BSE rose to 4 per cent in April while the BSE 250 smallcap index rose by 3.9 per cent in this period. The Sensex rose 3.7 percent during this period. Midcap and smallcap shares can perform continuously well if the broad market perception remains strong, as was seen in the previous boom cases.

For example, BSE Midcap and BSE 250 Smallcap Index rose 34 per cent and 30.8 per cent between December 2023 and September 2024, while the Sensex rose by 16.7 per cent during this period.

Five shares have been selected from midcap and smallcap area here. These shares are climbing and providing excellent mixed bets of high returns on revenue and income hike, proper assessment and equity. The shares have been selected from BSE Midcap and BSE 250 smallcap indices. But these have not included companies in banking, finance, insurance, asset management and equity broking (BFSI) sector.

Midcap

Ashok Leyland

– Where the sale of medium and heavy commercial vehicles (M&HCV) was weak in FY 2025 due to the election and decrease in government spending last year. But brokers are expected to improve it in FY 2026
– Investment on infrastructure, strong freight rates and demand for diesel can provide relief to this area in the current situation.
– Margin is likely to help with pricing discipline in large companies. The average sales price of vehicles in the quarter of March 2025 is estimated to be high due to rising truck mixture, operational efficiency and product mix.
– Ashok Leyland’s emphasis on increasing market participation and improving operating profits margins will help him to increase strong income.
-BNP Pariba Research believes that there is scope for sharing of CV demand and improving income estimate for pure-level CV company

Arvindo Pharma

– However, revenue is expected to increase in two digits in the short term. But the gross and operating profit of Arvindo can remain stable due to the fall in the prices of raw materials.
– The drug manufacturer will be among the major beneficiaries of stability in generic pricing in the US market
-BP equities say that the penicilin-G unit with strong capacity expansion and improvement will be helpful in income hike for Arvindo Pharma in the coming years.
-Kotak Research says that the company can register an increase of 11 percent per share per share during FY 2024-27 which may be possible due to sales hike of two-digit for many non-American formulations markets, benefits from pen-G project and soft production costs due to cost.

Majgaon dock shipbuilders

-Majgaon Dock Shipbuilders are the only company that is technically technically eligible for 6 submarines with P75-i. This order can be more than Rs 50,000 crore whenever met
– In addition, orders of over Rs 25,000 crore are pending for the supply of three Scorpene class submarines. After receiving these orders, the company’s order box will exceed Rs 1.1 lakh crore.
-Brokerage firms believe that the public sector company will cross its 12-15 percent estimate of tax-profit margin in the next three years, as the current rate of implementation, strong booking revenue and strong order flow will help it

Dixon technologies

– The country’s largest electronic manufacturing service (EMS) company is the main beneficiary of the Palparija Production Incentive (PLI) scheme worth Rs 23,000 crore.
– Brokers believe that this legendary display will strengthen its backward integration in the display assembly, the camera module assembly and mechanical components
– Tariff war between America and China and other competitors like Tariff War will make Dixon a big benefit by becoming the basis of India for Calpuja Manufacturing
– The 50:50 partnership partnership with Signified (Philips Lighting) will also help in compensating for revenue fall in LED lighting business due to rising competition and price pressure. Keeping in mind the significance deal along with several factors, Kotak Research has increased income estimates and has added to the rating ‘reduce’ to the share to increase ‘to’.

Oil india

– Government -owned oil and gas producer Oil India shares strengthened by about 6 percent in April. The stock declined by about 50 per cent between August 2024 to March this year.
– Brokers seem to be likely to rise in the stock due to increase in oil and gas production and stability in crude oil prices.
– Integrated net profit and net sales of Oil India have increased by 24.3 and 5.4 percent in the last 12 months (TTM) ended till December 2024.
However, the net profit of the company declined by 43 per cent on an annual basis in the October-December quarter of FY 2025. Pressure on net profit, especially on other income, was under pressure due to a weakness of 53 per cent on an annual basis.
– Elara Capital analysts estimate 25 percent increase in Oil India’s crude oil and 50 percent in its natural gas production in the next three years.

Smallcap

Natco Pharma

– Drug manufacturer may continue in the December quarter due to weakness in sales of cancer in the US market and pricing in domestic formulations, drug manufacturer’s drug manufacturer may continue in the fourth quarter of FY 2025 in the December quarter also in the fourth quarter of FY 2025.
– While high research and development expenses affected the company’s operational benefits and margin in the third quarter, the margin may be under pressure due to change in product mixture and price cuts in American business.
-In the future, renovation offers, important opportunities offered in the year 2025, and the launch of anti-diabetic drug semaglutide in India by March 2026 is expected to be promoted. Indesak Securities says that the company is eyeing the expansion and major acquisition in Brazil, Canada.

Chambal fertilizers and chemicals

– In the last three months, the shares of Chambal Fertilizers and Chemicals have gained huge rise and it has climbed about 50 percent since the end of January.
– This stock has gained 63 per cent in a year, making it one of the spectacular performance smallcaps.
– This boom in the stock has come due to improvement in fertilizer business and benefits from investing in technical ammonium nitrate plant and phosphoric acid expansion by Morocco joint venture
– In the third quarter of FY 2025, the company’s net sales increased by 13.1 per cent on an annual basis, which is more than the market estimate. The company’s net profit increased 16.3 per cent on an annual basis in the March quarter, although it was less than anticipated due to sluggish profit on the sale of fertilizers.
– The stock is trading on TTM PE of 16.8 times and P/BV of 3.3 times, which is much less than the current assessment of SENSEX

Techno Electric and Engineering

– Power sector engineering, procurement and construction (EPC) service provider Techno Electric shares about 7 percent in the month of April and 12 in the last 12 months
Get up
-This stock had heavy selling during January-March 2025 due to increased concerns and high evaluation.
– However, the brokers are excited on the company keeping in mind its power transmission and distribution segment and the possible revenue hike from the data center business.
– In the end of December 2024, the company’s net sales and net profit increased by 37.6 percent and 45.3 percent on an annual basis
– The order book of the company was at Rs 9,700 crore at the end of December 2024, which is an increase of 78.3 per cent on an annual basis and is equal to 4.7 times its EPC revenue.

Lamp fertilizers and petrochemicals

– Pune chemical producer Deepak Fertilizers and Petrochemicals shares rose 17 per cent in April and it has performed better than major indices in the last 12 months.
– Strong performance on the broker path has shown due to improvement in recent quarters of the company’s revenue and income growth.
– The company’s integrated revenue and net profit increased by 39.2 per cent and 335.6 per cent on an annual basis in the third quarter of FY 2025
Similarly, in the last 12 months period ended in December 2024, revenue and net profit was increased by 3.3 per cent and 80.5 per cent on an annual basis.
– Share is at the appropriate level with the previous PE multiple of 19 times and PB value of 2.9 times and it is much lower than the current assessment of the Sensex

Godfrey Philips

– Tobacco product manufacturer Godfrey Philips Hall has been one of the major smallcap shares who performed well recently.
– The company’s share price has climbed 20 percent in the last one month and 140 percent in the last 12 months.
– The share price rises due to strong revenue and income hike recorded by the company in recent months
– Godfrey Philips’ net sales in TTM ended in December 2024 increased by 26.4 per cent on an annual basis while net profit increased by 23.4 per cent on an annual basis
According to HDFC Securities, the speed of income is likely to remain, as the company’s market participation has increased due to the boom in Marlborough and Stellar Shift Brands.
– This stock is currently trading on PE of 40 times and P/BV of about 9 times, which is less than other major FMCG companies.

First Published – May 2, 2025 | 12:03 am IST

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