However, in March and February, the Nifty Midcap fell around 0.5 percent each while the Nifty Smallcap index declined 4.4 percent and 0.3 percent, respectively. Meanwhile, the benchmark rose over 1 percent in both those months, strongly outperforming the broader markets.
Read here: General Elections 2024: Will Nifty extend gains for 4th straight month in May?
The broader markets have been consistently hitting new peaks in September, except for some correction in February and March. Even though the benchmark Nifty is also at its record high, the bull run in the mid and small-cap stocks is unparalleled. All three indices hit their new peaks in the previous session, April 30.
The Nifty Midcap index hit its record high of 51,232.35 in the last session of April, now up over 60 percent from its 52-week low of 31,926.85, hit on May 2, 2023. Similarly, Nifty Smallcap 100 also hit a new high of 17,132.60 in the previous session, rallying over 76 percent from its 52-week low of 9,709.90, hit on May 2, 2023. Meanwhile, the benchmark Nifty hit a new high of 22,783.35, rising over 26 percent from its 52-week low of 18,042.40, hit on May 3, 2023.
Read here: Share market in April: M&M, Axis Bank among top 5 gainers as Nifty gains 1%
Overall in 2024 YTD, the Nifty Midcap index has surged over 10 percent, the Nifty Smallcap index has gained over 12 percent whereas the benchmark Nifty is up 4 percent.
Constituents
In the midcap index, Voltas and Supreme Industries were the top gainers, up over 23 percent each. Meanwhile, Mazagon Dock, Escorts Kubota, Indus Towers, JSW Energy, NMDC, Aditya Birla Capital rose over 15 percent each.
Meanwhile, among losers, L&T Tech and Tata Communications were top draggers, down almost 17 percent each. Meanwhile, Persistent Systems, One97 Communications, Oracle, and M&M Financial shed over 10 percent each.
Read here: India VIX: Market volatility may rise ahead of election results, gains limited
Among smallcaps, Tejas Network was the top performer, rallying over 51 percent followed by Exide Industries, which jumped 50.5 percent and Amara Raja, which rose over 38 percent. Meanwhile, Cochin Shipyard, Hindustan Copper, Chambal Fertilisers, Nippon India, Century Textiles, CESC, IIFL Finance, Himadri Specialty, Apar Industries, Aavas Financiers, and MCX advanced between 15 percent and 33 percent each.
Among losers, Gujarat State Petronet was the top loser, down over 19 percent followed by Birla soft, down over 15 percent. Meanwhile, Cyient, Olectra Greentech, Angel One, Swan Energy and NCC lost over 5 percent each.
Read here: ₹6.30 to ₹626.50: Multibagger stock turns ₹1 lakh to ₹1 crore in 4 years
Outlook
Most experts believe the rise in the broader markets will continue but remains cautious on their valuations. They advise choosing quality midcap and smallcap stocks with thorough fundamental and technical research.
Ravi Singh, SVP, Retail Research, Religare Broking
We believe that the outperformance will continue in the near term but as an investor, one should allocate 40 percent of his portfolio in large-cap stocks for stability and 30 percent each in small and midcaps for alpha generation over a longer time horizon.
Krishnan V R, Chief of Quantitative Research team at Marcellus
Because the small and mid-cap segment in India includes everything apart from, say, the biggest 100 stocks, it offers plenty of opportunities to pick good quality businesses with strong growth companies runway. Smaller companies can grow faster than the nominal GDP, unlike largecaps. For the broader markets, however, I don’t think we should expect FY24 performance this year given small and mid-cap indexes were roughly up around 60 percent last year, far outstripping the largecaps.
Read here: Not HDFC Bank or Axis Bank, Anand Rathi picks this banking stock to buy
Shauryam Gupta, CEO, Rupeezy
The risks in the small and midcaps have significantly increased owing to the debate of “froth” building up in the space. Several small-cap stocks have surged to lofty valuations, potentially outpacing their underlying financial performance. Given these heightened risks, investors may find it prudent to rebalance their portfolios towards large-cap stocks, which currently offer more compelling valuations.
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Published: 01 May 2024, 01:08 PM IST