7 Best Small Cap Stocks To Buy In India

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While the Sensex has been grinding for the last few weeks near the 31,000 points levels, the small cap index has slowly outperformed. These stocks tend to perform well and have the potential to rally. There are many stocks that are undervalued and have the potential to generate returns.

Here are a few small cap stocks that can make money for investors:

TV Today Network

The TV Today Network stock has fallen to a new 52-week low. The company that runs the Aajtak and the English News channel India Today has been able to perform consistently well in the last few quarters. In fact, Aaj Tak has provided consistent leadership growth in the Hindi news segment over the decades now. India Today continues to be among the top news channels in the country. We believe that as literacy rates improve, there would be a consistent increase in revenue growth. The company ha entered DD's Free Dish platform for an outlay of Rs 6 crore to gain better rural viewership. We believe that the company going forward can see a huge growth in business. Even if we assume a very conservative EPS of Rs 25 for 2018-19, the stock should trade at 15 times p/e multiple, which should take the stock to at least a price of Rs 375. The shares are currently trading at Rs 237. Check stock quote here


Transport Corporation of India

TCI as it is commonly known is one of the top transportation and logistics company's in India. The TCI Group manages a staggering 10,000 vehicles on the road each day along with 5 cargo ships. The company also owns 5 domestic ships. The company is going to be one of the biggest beneficiaries of GST and this will be reflected in the next few quarters. This is because reduction in transit times and consolidation of warehousing will be the big benefits for the company. Rationalizing the impact of taxes on production, distribution and inventory management will help the company enormously. Transit time would be cut as there would be lesser/no checks and paper works as well across the state borders. The huge outlay in roads would cut transport time and ensure greater efficiency. All this is likely to benefit Transport Corporation of India.

Reasonable priced

TCI has an ambitious expansion plan in the coming years. This along with a consumption led demand from FMCG and retail should drive demand. The company reported an EPS of Rs 9.15 for FY 2016-17. This is likely to improve going forward, which should take the EPS to at least Rs 14. The stock should get a p/e of 20 times, taking the price to Rs 300. If you are able to hold the stock for the next 2-3 years, you should see your money multiplying. A good small cap stock to own at the current levels even in a rising market.

Check stock quote of TCI here


Century Enka

Century Enka is a part of the BK Birla group, which is engaged in the manufacture of Polyester Filament Yarn, Nylon Filament Yarn, Polyester POY etc. This is one stock that has remained undervalued even in a rising market. The company reported a decent set of results for the FY 2016-17, wherein the EPS was placed at Rs 41.62 for the year. At Rs 387 the stock is not even trading at a p/e of 10 times. The shares of century Enka have hit a 52-week high of Rs 484 recently, but has fallen from those levels.  The shares of the company also give you a decent dividend yield of as much as 2 per cent. In fact, the book closure now is slated only in the month of July. Buy the stock for medium to long term gains.

Also read: Best largecap stocks to buy


Sasken Technologies

This is one stock that looks undervalued at the current levels of Rs 395. Sasken Technologies provides services and solutions in 3G wireless and broadband DSL technologies, Internet gateways, signal processing, and IC design. For the quarter ending March 31, 2017, the company reported an EPS of Rs 9.98. If you assume that the company does an EPS of Rs 40 in the next year, the stock is quoting at a p/e of just 10 times, which makes it very attractive at the current levels.

Check stock quote of Sasken here

Not a bad small cap stock to buy at highly undervalued levels.

Talwalkars True Vaue

This is another stock that has the potential to rally and make money for investors in the coming years. Talwalkars True Value operates and runs Gyms under the popular Talwalkar brand. It has plans to add many more gyms in the coming years. The company reported a huge surge in EPS to Rs 7.77 for the quarter ending March 31, 2017. Even if the momentum continues due to the expansion plans, Talwalkars can report an EPS of Rs 20 for 2017-18. For a company that is more into the retail segment and is one of the top players in the business the stock should get a discounting of at least 20 times. This should take the stock to at least Rs 400 in the coming days from the current market price of Rs 275.

Check stock quote here

J B Chemicals

J B Chemicals is an established and old pharma company. It is a major player in the Gastro, Cardiac and Pain management areas. It has a Femident division focusing on Dental and Gynaec segments.

The company has been aggressively marketing its products and constantly innovating. We believe that the company has immense growth potential in the future. The stock closed at Rs 321 on the NSE. If you want to buy JB Chemicals it is one of the better small cap companies. The company recently offered a buyback of shares at a price of Rs 400, which should reduce the equity capital and boost the EPS even further in the coming years.

Also read: Best midcap stocks to buy


RSMW is a spinning and weaving mills company, formerly called Rajasthan Spinning and Weaving Mills.

This stock has a small equity of Rs 23 crores only. It declares a huge dividend of Rs 12.5 per share, which takes the dividend yield itself to 2.25%.

The company can report a full year EPS of Rs 65, which leaves the p/e at just around 7 times at the current price of Rs 450. Not a bad bet at the current levels. You also get a dividend if you buy the stock now.

Check stock quote of RSMW here


The article is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author  do not accept culpability for losses and/or damages arising based on information in this article.

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