Small caps recover in Mar-25; but alpha hunting still missing

2 Apr 2025 , 09:42 AM

SMALL CAPS – AFTER 2 BAD MONTHS, COMES THE RESPITE

After 2 really tough months, March did come as some respite for small caps. In fact, small caps lost -10.81% in January 2025 and another -11.13% in February 2025. In contrast, the 9.49% rally in March 2025 did come as some sort of relief. However, the small cap index is still about -14.2% down in the first 3 months of 2025. Volatile oil prices, high inflation and a weak rupee have all contributed to weakness in the small cap index. Let us start with small cap stocks in March 2025 from the perspective of momentum?

SMALL CAP MOMENTUM RECOVERS IN MARCH 2025

In terms of 1-month returns, the Nifty Small cap 100 gained 9.49% in March 2025. Out of the 87 eligible stocks in the index, 75 stocks gave positive returns, while 12 stocks gave negative returns in March 2025. Here are the top-15.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
ZENTEC	1,478.85	41.45%	54.58%	2,627.00	882.00	67.67%	43.71%
GRSE	1,674.10	34.21%	120.44%	2,833.80	762.15	119.65%	40.92%
BEML	3,230.00	31.16%	1.13%	5,488.00	2,350.00	37.45%	41.14%
GODFRYPHLP	6,776.00	30.44%	119.12%	8,480.00	2,907.55	133.05%	20.09%
AMBER	7,180.00	28.11%	97.14%	8,177.00	3,310.00	116.92%	12.19%
JWL	366.10	27.26%	-1.31%	748.10	270.05	35.57%	51.06%
WELSPUNLIV	134.30	26.37%	-1.80%	212.95	104.80	28.15%	36.93%
POONAWALLA	348.00	24.58%	-24.73%	514.00	267.20	30.24%	32.30%
ASTERDM	476.00	19.99%	18.13%	558.00	311.10	53.01%	14.70%
SHYAMMETL	857.00	19.96%	44.30%	956.90	524.20	63.49%	10.44%
NCC	209.27	19.70%	-9.84%	364.50	170.05	23.06%	42.59%
ACE	1,260.00	19.69%	-11.88%	1,695.00	917.45	37.34%	25.66%
RKFORGE	768.00	19.34%	11.87%	1,064.05	604.20	27.11%	27.82%
CAMS	3,712.00	18.46%	27.70%	5,367.50	2,896.00	28.18%	30.84%
PPLPHARMA	224.80	18.36%	74.36%	307.90	119.35	88.35%	26.99%

Data Source: NSE

In March 2025, 49 stocks gave double digit returns. In terms of sectoral mix; the top-15 had 3 Defence stocks; while the rest of the stocks were largely bottom up plays. The worst performers in March 2025 by monthly returns were Devyani International, Birlasoft, Trident, TTML, and Zensar Technologies.

DID SMALL CAPS DELIVER ON 1-YEAR RETURNS?

For the 87 small cap stocks with full data, the average 1-year return was 5.40%. A total of 48 stocks gave positive 1-year returns, while 39 stocks delivered negative returns for March 2025. Here are the top-15.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
GRSE	1,674.10	34.21%	120.44%	2,833.80	762.15	119.65%	40.92%
GODFRYPHLP	6,776.00	30.44%	119.12%	8,480.00	2,907.55	133.05%	20.09%
AMBER	7,180.00	28.11%	97.14%	8,177.00	3,310.00	116.92%	12.19%
NEULANDLAB	11,950.00	13.76%	90.94%	18,100.00	5,540.10	115.70%	33.98%
CHAMBLFERT	621.00	17.20%	82.89%	633.00	333.40	86.26%	1.90%
PPLPHARMA	224.80	18.36%	74.36%	307.90	119.35	88.35%	26.99%
FSL	339.00	-1.66%	72.15%	422.30	176.25	92.34%	19.73%
WELCORP	862.00	18.04%	68.76%	900.00	440.15	95.84%	4.22%
KFINTECH	1,029.90	18.26%	67.78%	1,641.35	592.00	73.97%	37.25%
KAYNES	4,722.05	14.56%	65.30%	7,822.00	2,424.00	94.80%	39.63%
MCX	5,303.00	6.41%	58.58%	7,048.60	2,917.85	81.74%	24.77%
PCBL	424.20	18.25%	58.14%	584.40	209.00	102.97%	27.41%
ANANTRAJ	490.40	6.12%	57.89%	947.90	304.20	61.21%	48.26%
LAURUSLABS	611.50	16.35%	56.34%	646.20	385.45	58.65%	5.37%
ZENTEC	1,478.85	41.45%	54.58%	2,627.00	882.00	67.67%	43.71%

Data Source: NSE

On a yoy basis, the leaders were dominated by a mix of 3 Healthcare plays (Piramal Pharma, Neuland Laboratories, and Laurus Labs), 2 defence companies (Garden Reach, Zen Tech), 2 EMS companies (Kaynes, Amber), and 2 chemical companies (Chambal, PCBL). The remaining stocks in the above list, were largely spread out across different sectors. At the bottom are companies like Inox Wind, JBMA, Rites, and Sonata Software.

HOW RESILIENT WERE SMALL CAPS IN LAST ONE YEAR?

In terms of bounce from lows, small caps bounced 12.56%. Total of 13 stocks bounced over 70% from the lows, while 53 jumped over 20%. Top-15 average bounce was 121.88%.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
PGEL	910.00	15.32%	-44.85%	1,054.20	154.43	489.26%	13.68%
GODFRYPHLP	6,776.00	30.44%	119.12%	8,480.00	2,907.55	133.05%	20.09%
GRSE	1,674.10	34.21%	120.44%	2,833.80	762.15	119.65%	40.92%
AMBER	7,180.00	28.11%	97.14%	8,177.00	3,310.00	116.92%	12.19%
NEULANDLAB	11,950.00	13.76%	90.94%	18,100.00	5,540.10	115.70%	33.98%
PCBL	424.20	18.25%	58.14%	584.40	209.00	102.97%	27.41%
WELCORP	862.00	18.04%	68.76%	900.00	440.15	95.84%	4.22%
KAYNES	4,722.05	14.56%	65.30%	7,822.00	2,424.00	94.80%	39.63%
FSL	339.00	-1.66%	72.15%	422.30	176.25	92.34%	19.73%
PPLPHARMA	224.80	18.36%	74.36%	307.90	119.35	88.35%	26.99%
CHAMBLFERT	621.00	17.20%	82.89%	633.00	333.40	86.26%	1.90%
MCX	5,303.00	6.41%	58.58%	7,048.60	2,917.85	81.74%	24.77%
KFINTECH	1,029.90	18.26%	67.78%	1,641.35	592.00	73.97%	37.25%
RADICO	2,425.00	17.17%	40.58%	2,637.70	1,429.85	69.60%	8.06%
ZENTEC	1,478.85	41.45%	54.58%	2,627.00	882.00	67.67%	43.71%

Data Source: NSE

On resilience score, the list was once again dominated by stocks in the healthcare, chemicals, new age technology and the financial inclusion space. The remaining stocks were largely spread out and roughly mirrored the 1-year return rankings list. The list at the bottom included stocks like; Birlasoft, Sonata Software, Trident, HFCL, Bata India, and TTML.

HOW SMALL CAPS FARED ON THE SWING FACTOR?

In terms of proximity to the peak, the small cap index was 18.36% short of the peak. A total of 8 stocks are less than 10% to the peak while 52 stocks are over 30% off the peak.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
NH	1,694.30	17.14%	31.80%	1,724.35	1,080.00	56.88%	1.74%
CHAMBLFERT	621.00	17.20%	82.89%	633.00	333.40	86.26%	1.90%
NAVINFLUOR	4,204.00	11.92%	35.21%	4,381.00	2,875.95	46.18%	4.04%
WELCORP	862.00	18.04%	68.76%	900.00	440.15	95.84%	4.22%
LAURUSLABS	611.50	16.35%	56.34%	646.20	385.45	58.65%	5.37%
MANAPPURAM	231.50	15.82%	34.42%	247.60	138.35	67.33%	6.50%
REDINGTON	243.45	8.31%	16.55%	263.89	158.61	53.49%	7.75%
RADICO	2,425.00	17.17%	40.58%	2,637.70	1,429.85	69.60%	8.06%
SHYAMMETL	857.00	19.96%	44.30%	956.90	524.20	63.49%	10.44%
AMBER	7,180.00	28.11%	97.14%	8,177.00	3,310.00	116.92%	12.19%
PGEL	910.00	15.32%	-44.85%	1,054.20	154.43	489.26%	13.68%
AFFLE	1,610.00	14.88%	54.42%	1,884.00	1,022.75	57.42%	14.54%
ASTERDM	476.00	19.99%	18.13%	558.00	311.10	53.01%	14.70%
KARURVYSYA	209.00	4.04%	14.53%	246.00	164.10	27.36%	15.04%
RAMCOCEM	892.75	8.17%	10.63%	1,060.00	700.00	27.54%	15.78%

Data Source: NSE

In terms of proximity to the peak, the list is dominated by Healthcare (Narayana Hrudayalaya, Laurus Labs, and Aster DM); Chemicals (Chambal Fertilizers, Navin Fluorine); and financial inclusion (Manappuram Finance and Karur Vysya Bank). Companies farthest from the peak were a mixed bag of stocks like Titagarh Wagons, IRCON, Sonata Software, Data Patterns, HFCL, IFCI, and Natco Pharma. Despite the recovery in March 2025, the swing factor for small cap companies has largely deteriorated in 2025. The themes in small caps are gravitating towards specialty chemicals, healthcare, and financial inclusion.