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Time of India
3 days ago
- Business
- Time of India
Smallcaps soar Rs 75 lakh crore in value over 7 years, growing 5x: Study
India's small-cap stocks have added a staggering Rs 75 lakh crore in market value since 2017, ballooning from Rs 17 lakh crore to Rs 92 lakh crore by end-2024, a fivefold jump driven by a 27.6% compound annual growth rate, according to a study by Bajaj Finserv Asset Management Company (AMC). This sharp rise dwarfs the returns of large-cap and mid-cap peers and underscores the growing clout of small caps in India's equity landscape. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Many Are Watching Tariffs - Few Are Watching What Nvidia Just Launched Seeking Alpha Read Now Undo The study found that while large-cap and mid-cap indices posted a CAGR of 14.5% and 21.6% respectively between 2017 and 2024, small caps have firmly outpaced them. More telling was the contribution of small-cap companies to the overall market capitalisation, which rose 1.4 times over the past three years, even as their share of corporate profits swelled 2.5 times in the last four years. Despite a modest 4% rise in the small-cap index since FY24, the segment saw a 38% jump in profit after tax (PAT) during FY25, climbing from Rs 21,669 crore to Rs 29,941 crore. Bajaj Finserv AMC pointed out that this decoupling between prices and earnings suggests 'unrealized value' in the space. Moreover, the study noted that '74% of the top 250 small-cap companies reported a double digit returns on capital employed (ROCE),' signaling strong fundamentals despite recent price corrections. Live Events Quality is key as volatility persists The second half of FY25 saw a correction in small-cap stocks, with most still trading below their 52-week highs as of April 2025. This has opened up 'an opportunity to accumulate quality small caps at better valuation,' the study said. Still, the volatility underscores the importance of selectivity. Bajaj Finserv AMC warns that 'nearly 50% of small-cap companies from 2017 have declined into the micro-cap category,' reinforcing the risk of indiscriminate exposure. Although 196 small-cap IPOs hit the market since 2020, only four have transitioned to mid-cap status and none to large-cap territory — further highlighting the need for careful stock selection. Quality index outshines peers Bajaj Finserv AMC emphasized that quality small caps have consistently outperformed their broader counterparts. 'The Nifty Small Cap 250 Quality 50 TRI has outperformed the Nifty Small Cap 250 TRI in 14 of the last 19 financial years,' the study said. In fact, the quality index 'delivered higher returns than all other indices in nine financial years from FY10,' with evidence that it has weathered volatility better in 17 of the past 19 financial years. Additionally, in some years, the Small Cap Quality index 'has exhibited lower standard deviation than large caps,' the study said, underlining its potential for steadier performance. While smallcaps remain prone to cyclical movements and elevated risk, the study presents a case for investors to reassess the segment with a quality lens. The long-term outperformance of quality indices and growing earnings power signal a maturing sector, albeit one that still demands rigorous screening and discipline. Also read | Neither largecaps, nor smallcaps! India Inc's Q4 result season belongs to the middle order
Economic Times
3 days ago
- Business
- Economic Times
Smallcaps soar Rs 75 lakh crore in value over 7 years, growing 5x: Study
India's small-cap stocks have added a staggering Rs 75 lakh crore in market value since 2017, ballooning from Rs 17 lakh crore to Rs 92 lakh crore by end-2024, a fivefold jump driven by a 27.6% compound annual growth rate, according to a study by Bajaj Finserv Asset Management Company (AMC). ADVERTISEMENT This sharp rise dwarfs the returns of large-cap and mid-cap peers and underscores the growing clout of small caps in India's equity landscape. The study found that while large-cap and mid-cap indices posted a CAGR of 14.5% and 21.6% respectively between 2017 and 2024, small caps have firmly outpaced them. More telling was the contribution of small-cap companies to the overall market capitalisation, which rose 1.4 times over the past three years, even as their share of corporate profits swelled 2.5 times in the last four years. Despite a modest 4% rise in the small-cap index since FY24, the segment saw a 38% jump in profit after tax (PAT) during FY25, climbing from Rs 21,669 crore to Rs 29,941 crore. Bajaj Finserv AMC pointed out that this decoupling between prices and earnings suggests 'unrealized value' in the the study noted that '74% of the top 250 small-cap companies reported a double digit returns on capital employed (ROCE),' signaling strong fundamentals despite recent price corrections. The second half of FY25 saw a correction in small-cap stocks, with most still trading below their 52-week highs as of April 2025. This has opened up 'an opportunity to accumulate quality small caps at better valuation,' the study said. ADVERTISEMENT Still, the volatility underscores the importance of selectivity. Bajaj Finserv AMC warns that 'nearly 50% of small-cap companies from 2017 have declined into the micro-cap category,' reinforcing the risk of indiscriminate exposure. Although 196 small-cap IPOs hit the market since 2020, only four have transitioned to mid-cap status and none to large-cap territory — further highlighting the need for careful stock selection. Bajaj Finserv AMC emphasized that quality small caps have consistently outperformed their broader counterparts. 'The Nifty Small Cap 250 Quality 50 TRI has outperformed the Nifty Small Cap 250 TRI in 14 of the last 19 financial years,' the study said. In fact, the quality index 'delivered higher returns than all other indices in nine financial years from FY10,' with evidence that it has weathered volatility better in 17 of the past 19 financial years. ADVERTISEMENT Additionally, in some years, the Small Cap Quality index 'has exhibited lower standard deviation than large caps,' the study said, underlining its potential for steadier smallcaps remain prone to cyclical movements and elevated risk, the study presents a case for investors to reassess the segment with a quality lens. The long-term outperformance of quality indices and growing earnings power signal a maturing sector, albeit one that still demands rigorous screening and discipline. ADVERTISEMENT Also read | Neither largecaps, nor smallcaps! India Inc's Q4 result season belongs to the middle order (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
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Business Standard
3 days ago
- Business
- Business Standard
How to make money in stock market? Bet on small-caps, say analysts
Investing in quality small-cap stocks for the long-term is a good way to make money in the stock markets, suggest analysts. A recent note by Bajaj Finserv AMC suggests India's small-cap segment has delivered healthy growth over the past seven calendar years, with market capitalisation (market-cap) of this basket surging fivefold – from ₹17 trillion in 2017 to ₹92 trillion by the end of 2024 — reflecting a robust compound annual growth rate (CAGR) of 27.6 per cent during this period. In comparison, large-cap and mid-cap segments recorded CAGR of 14.5 per cent and 21.6 per cent, respectively, during the same period, Bajaj Finserv AMC shows. The contribution of small-caps to the overall market-cap has grown 1.4 times over the last three years, the note said. At the same time, their contribution to corporate profits has surged 2.5 times in the past four years. This trend, Bajaj Finserv AMC said, reflects the increasing prominence of the small-cap segment and the broader range of investment opportunities it now presents. The Nifty Small Cap 250 Quality 50 total returns index (TRI) has outperformed the Nifty Small Cap 250 TRI in 14 of the last 19 financial years, Bajaj Finserv AMC findings reveals. Overall, the quality index delivered higher returns than most other indices in nine financial years from FY10. The road ahead Market experts believe that small-cap segment holds promise even at the current juncture, provided investors do their homework diligently, invest in quality stocks and stay put for the long term. 'I continue to believe India is a small-cap market. While the headline indexes - the BSE Sensex and the Nifty 50 - may not deliver much return for the next couple of years, at smaller levels there are amazing companies in India,' said Shankar Sharma, founder, GQuant Investech. As of April 2025, most small-caps continue to trade below their 52-week highs, making the segment appealing from a valuation standpoint, experts suggest. While the small-cap index gained only 4 per cent since fiscal year 2023-24 (FY24), profit after tax (PAT) of companies in this segment grew by 38 per cent, highlighting the segment's unrealised value, the Bajaj Finserv AMC note said. "Despite the price correction, small-cap profits rose to ₹29,941 crore in FY25 from ₹21,669 crore in FY246. Moreover, 74 per cent of the top 250 small-cap companies reported a double digit returns on capital employed (ROCE), indicating strong underlying fundamentals," the note said. At the bourses, meanwhile, the Nifty Smallcap 250 index has seen an impressive run in the last two years till date with a gain of 64.4 per cent. The Nifty 50 index, on the other hand, moved up 32 per cent during this period, ACE Equity data shows. Transformers & Rectifiers (India) has been the top performer among small-cap stocks, rallying 1,132 per cent in the last two years till date. Wockhardt, Garden Reach Shipbuilders, IFCI, Multi Commodity Exchange of India, JSW Holdings, Godfrey Phillips India and PG Electroplast are some of the other stocks that zoomed between 365 per cent and 703 per cent during this period, ACE Equity data shows. "Most macroeconomic parameters remain conducive for the markets. Only major concern for the Indian equity market is ongoing war between Israel and Iran. Any possible rise in oil prices beyond $90 a barrel would impact the domestic equities quite significantly. Otherwise, the Indian market outlook – especially for the small and mid-cap segment - remains very robust," said G Chokkalingam, founder and head of research at Equinomics Research.
Time of India
29-04-2025
- Business
- Time of India
Largecaps remain attractive amid global volatility and tariff uncertainty: Sorbh Gupta
"It is a domestic oriented story. 60% of GDP is domestic, least impacted by tariff , and much better valuation especially on the largecaps, all these things put together are working in favour of allocations to India and that is what we are quite nicely buying from FPI in Indian equities and that is clearly supporting the markets and the resilience that you talked about," says Sorbh Gupta , Bajaj Finserv AMC. Tell us, one of the major factors that is really contributing to this resilience in the market, we did see the two-day drawdown on the back of sentiment, but we have started moving up yet again, so that resilience has really aided by a renewed FII interest in Indian markets. In fact, we have been seeing almost 32,400 crores worth of buying in the last eight sessions by the FIIs. Now, given what is playing out in the US, the underperformance by US market, also the moderation in in the US dollar index and the bonds, is the FII interest in India likely to sustain and provide a cushion for the markets going ahead? Sorbh Gupta: Oh, absolutely, we saw $30 billion of selling. Our valuation comfort improved much better than other peer groups, emerging markets and developed markets, over the last six months. And the way whole tariff things have shaped up from a safe heaven perspective, a domestic oriented story plus valuation comfort plus least impacted by tariff, all these things put together I am sure people who moved out in a hurry from India in terms of FPI flows towards maybe US or China are clearly looking back at India. It is a domestic oriented story. 60% of GDP is domestic, least impacted by tariff, and much better valuation especially on the largecaps, all these things put together are working in favour of allocations to India and that is what we are quite nicely buying from FPI in Indian equities and that is clearly supporting the markets and the resilience that you talked about. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo But help us understand that amidst this market which are the sectors that you are overweight on and which are the sectors which are not giving you that much of a confidence and you do not have much of a positive stance there. Sorbh Gupta: So, very clearly, we have oriented our portfolios towards more domestic consumption. There are multiple triggers plus valuation comfort that are lined up there. This includes discretionary and staples. So, the portfolio allocations in terms of overweight are towards domestic consumption in the next three-six months with multiple triggers like tax rebate starting to play out in people's hand from April onwards, plus a good monsoon, rural pickup, all these things put together shall support domestic consumption. The portfolio allocation has moved towards more of domestic consumption including banks. Banks are beneficiary of domestic economy doing well. So, banks is also one of them. We are also positive on pharma, not necessarily generic US exporter but more towards crams and domestic pharma, so that is a pocket we are very positive upon. Live Events We are positive on insurance. We are clearly underweight it or any other export-oriented businesses which gets impacted because of US slowdown, so that is one pocket we are a little underweight over there, so that is the broad allocation, more tilted towards consumption, more of healthcare but healthcare domestic oriented or crams not US generic necessarily and underweight it. We are still looking at some triggers for growth in autos. So, we are careful on autos, very-very selective. We are still not seeing a lot of growth, but hopefully as economy recovers, domestically things should play back on autos, but we are still an underweight on autos. Also, talk to us about the small and the midcap space. Despite the considerable correction that we have seen, do you have valuation comfort because some of the names are still trading at a premium. So, how do you view that space because that is where really where the wealth generation happens as far as the small and the midcaps are concerned and investors would like to know that at this juncture is the smid space really still at a premium and it is a wait and watch before you actually park your funds there? Sorbh Gupta: Yes, absolutely. If you had asked me this question six months ago, I would clearly say that there is a lot of froth and please stay away from mid and smallcaps. But over the last six months what we have seen is though broad based at a blanket level I can always say that still valuations are uncomfortable relative to largecaps, but clearly some pockets of comfort have started to emerge over last three months in midcaps and smallcap space also. So, some quality names, some pockets where valuation comfort has emerged those pockets one can take a contrarian call where triggers are lined up and we believe one has to be a bit more selective, but compared to what was maybe in September, October situation is better in terms of valuation comfort in mid and smallcap, so maybe some things can be picked up from mid and smallcap space also, not a blanket trade right now from a valuation comfort, on a blanket trade perspective largecaps are still better placed, but yes, some pockets of comfort have started to emerge in mid and smallcap also for us and that is where we are looking at, but not a blanket trade mid and smallcaps, It is not a blanket call on SMIDs, but tell us what are these pockets of comfort for you then? Sorbh Gupta: So, one should look at chemicals. Chemicals is a space where some triggers are lined up, valuation comfort is there, a lot of companies have completed their capex. So, we believe that is one pocket one should look at. Auto ancs is also one pocket where valuation comfort has emerged. Again, a lot of capex companies have completed, waiting for an upcycle in demand. So, people might have to wait. It can be a bit of a contrarian call, but valuation comfort has emerged, not much downside, so these two pockets clearly are emerging as very good. As I talked about crams space. So, within crams space, there are some good high-quality midcaps and smallcaps on the pharma crams where one should look at. So, these are clearly pockets where valuation comfort has increased. We clearly see some triggers lined up over the next three, six, nine months to be invested in these companies and, of course, not to leave alone cement . Cement is also one pocket we are very bullish, both largecaps and smallcap. We believe this year demand should be good, pricing power should come back in cement, so that is also one sector even in the smallcap space you can look at.
Time of India
26-04-2025
- Business
- Time of India
Mind Over Money: Discipline, humility, and dal-chawal: Ganesh Mohan of Bajaj Finserv AMC on his Everest base camp trek
In a world driven by deadlines and high-stakes decisions, mental clarity often feels like a luxury. But for Ganesh Mohan , Managing Director of Bajaj Finserv AMC , it's a necessity—sharpened not just in boardrooms but also at 4,000 metres above sea level. In this edition of Mind Over Money, Mohan takes us through his transformative journey to the Everest base camp , where every step became a lesson in grit, every meal a moment of gratitude, and the majestic mountains a reminder of humility. As he reflects on how the rigours of the trek mirrored the challenges of leadership, Mohan shares how staying grounded—sometimes with just a bowl of dal-chawal—can power extraordinary mental resilience . Edited Excerpts – Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Q) Thanks for taking the time out. As the managing director of a fast-paced asset management company, how do you maintain your mental well-being amidst constant demands and decisions? A) For any leader today, a key mental well-being priority is about managing and maintaining balance. Live Events This balance spans multiple areas - between diving into the details versus being able to zoom out to see the big picture; dedicating chunks of time to daily firefighting versus long-term strategic thinking, as well as between being fully hands-on versus having time to disconnect and recharge. This is even more so in a business like ours, where the markets have their own daily ups and downs. To be able to successfully manage your mental well-being in such an environment, you need to be able to compartmentalise your thoughts, time, and efforts. Creating time boxes for specific types of activities, being fully immersed in whatever you do at any time, as well as having interests outside work that allow you to recharge yourself, are all critical to maintaining mental well-being & effectiveness at the workplace. After doing all the above, if I am still stressed about something, I ask myself a simple question, "Will this issue matter to me in five years' time?' In most cases, a perspective like that can help address a lot of what seems like an insurmountable problem at the time. Q) You mentioned Indian classical music has been a part of your life since childhood. How does music help you stay centred and mentally calm? A) I believe that classical music (whether Hindustani, Carnatic, or any other form) strongly aids mental development and connects at a very subtle level with our mental energy. Appreciating classical music requires you to have patience and discipline. It requires you to practice regularly and go through a rigorous structure to improve your own understanding and ability. All these traits help build mental resilience and a more centred approach, which naturally extends into your daily life as well. Q) Trekking to the base of Mount Everest is no small feat - how did that experience challenge your mental toughness and shape your perspective? A) The Everest base camp trek taught me fundamentally about two critical things - grit and gratitude. The grit part is obvious since it requires extensive training ahead of the trek as well as significant endurance while on the trek. Waking up at 5 AM every day to practice as well as walking over 15 km every day on an uphill trek are not easy at all and build tremendous mental fortitude. But the true gift that I received from the trek was that of gratitude. When you come face-to-face with the imposing presence of the mountain, you realise that you do not climb and conquer it, but rather you navigate it with discipline, respect, and humility - one step at a time. At altitudes above 4,000 m, life is stripped down to its essentials, and you learn to appreciate what you have been given. A bowl of dal-chawal or even a tin shed for shelter feels like a luxury up there. Above all, it helps you adapt to tough environments with a smile that you can see perennially on the faces of the sherpas who guide you. Q) In today's high-performance work culture, what advice would you give professionals and leaders about protecting their mental well-being? A) As I mentioned above, a key aspect of mental well-being is about maintaining balance. I believe we all lead four lives. The first is physical life, which is about the body and maintaining its fitness. The second is about our mental life, which is about constantly learning and challenging our mental boundaries. The third is about our financial life, which is about ensuring that we have the resources to do what we need in this world. The fourth is a spiritual life, which is about how we connect to a greater purpose beyond ourselves. I would advise every professional and leader to consider what they are doing to improve aspects of each of their four lives. It is important for us to regularly pause and ask ourselves: What are we doing to lead better lives in each of these four dimensions? Q) Do you consciously build mindfulness or reflection time into your daily routine? If so, what practices help you disconnect and recharge? A) Absolutely. For me, mindfulness means fully engaging and immersing myself in whatever I am doing at any point of time. I try to minimise distractions and exclusively channel my thoughts on one specific area at a time. Beyond that, on a regular basis, I try to mentally challenge myself through puzzles like sudoku and crosswords. I also try to run 3-4 times a week & meditate occasionally. Q) How important is it for leaders to model healthy mental habits for their teams? A) People see what you do far more than listen to what you say. Hence, it is more important for you to role model behaviours that enhance mental health and mental well-being for your team. Particularly post-COVID, mental health has become a significant challenge for many people in the workforce, and it is up to us as leaders to bring it to the centre stage by displaying the right behaviours. I have also found that high-performing teams often laugh together and have a lot of fun working with each other. It is a good idea to inject some humour to lighten the mood from time to time. A mentally strong team will be ready to face and win many more battles along with you. ( Disclaimer : Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
