On a year-to-date basis, broader markets or precisely the small cap and mid cap indices have outperformed the headline indices with returns of 38% and 30%, respectively, while during the same timeframe Nifty index has gained by 11.96%. Talking specifically about the small cap index, there has been a continuous up move for eight straight months with no intermediate drag in between. Below are listed top small cap stocks in which mutual funds are bullish and have bought them in the month of May or in a prior period:
1. TCNS Clothing:
The apparel company catering to the women section owns popular brands such as Aurelia, W, Wishful etc. The company made its stock market debut on July 30, 2018 and listed at a price of Rs. 715 per share on the BSE. Currently, the stock trades at a discount to its listing price at Rs. 544 and commands a m-cap of Rs. 3,346 crore. In May, Axis Mutual Fund increased its holding in the scrip of TCNS. In the December quarter, the company posted PAT at Rs. 12.66 crore after 3-consecutive quarters of losses.
In the year period, the stock has underperformed Sensex with return of 44% as against Sensex 1-year return of 56%.
2. Magma Fincorp:
The 1-year return from this leasing and hire purchase financing major is 612 percent as against Sensex absolute return of 56% during the same time. In May Aditya Birla Sunlife AMC bought stake in the company worth Rs. 73 crore. On June 17, 2021, the stock settled at a price of Rs. 153.4 per share on the NSE. ICICI Securities has a ‘Buy' recommendation on the scrip with a price target of Rs. 173.
3. Butterfly Gandhimathi Appliances:
The domestic appliance company is into manufacturing of home appliances, cookware and kitchen products. Established in 1986, the company is a pioneer in stainless steel products. In the last one-year the scrip is up 524 percent and has outperformed the Nifty Small cap 100 index. M-cap of the scrip after the closing of trading session on June 17 is Rs. 1,307 crore. The stock has been added by DSP BlackRock.
4. EID Parrry (India) Ltd:
As it is the prospects of sugar companies have sweetened with the centre now advancing the ethanol blending programme. This small cap sugar stock has been picked by Quant Money Managers and Sundaram AMC. Over a 1-year period, the stock has provided a return of 81 percent, while YTD return of the stock is 24%.
5. Poly Medicure:
This hospital and medical services scrip last closed at a price of Rs. 891.4 per share on the NSE. M-cap of the scrip is Rs.8546 crore. As against the industry P/E of 22.39, the scrip commands a P/E of 66.56 and has zoomed 195% in the last one year. UTI AMC bought stake in the company in the March quarter.