The Best And The Worst Small And Mid Caps Of The Year

India’s benchmark index has outperformed its global peers so far this year, but the broader indices have not fared well.

The Nifty Midcap Index has declined nearly 14 percent and the Nifty Smallcap Index dropped over 21 percent in 2018. That compares with a 2 percent gain in the NSE Nifty 50 Index. Besides the falling rupee and rising crude oil prices, the selloff in mid and small caps was aggravated by the market regulator’s increased surveillance on some of the stock to checking any abnormal surge not commensurate with their financial health.

Here’s a list of top five best and worst performing mid- and small-cap stocks in the first six months of the year:

Mid-Cap Gainers And Losers

The Best Five

• Indiabulls Ventures: The company issued preferential shares to foreign investors.
• Mindtree: A fluctuating rupee helped the company.
• Jubilant Foodworks: It recorded highest same-store-sales growth in six years. The company’s profits in the quarter also beat analysts’ estimates.
• Mphasis and Hexaware: The Nifty IT Index has outperformed all sectoral peers so far this year and has gained over 19 percent during the period.
• Gruh Finance: The board of the company, a subsidiary of Housing Development Finance Corporation, recommended a 1:1 bonus issue. Net bad loans was nil in the quarter ended March.

The Worst Five

• Vakrangee: Concerns over corporate governance issues, including investments in unrelated businesses, and the resignation of auditors.
• PC Jeweller: One of its founders gifted some shares to family members, raising concern about the company’s governance. An investment by Vakrangee, which has been a shareholder, into the company added to investors’ woes.
• Adani Power: The company suffered a loss of Rs 556.15 crore in the quarter ended March compared to a profit of Rs 791.72 crore in the three months to December 2017.
• Suzlon: Profits in the quarter ended March declined and corporate governance issues.
• Bank of India: Rising bad loan problems.

Small-Cap Gainers And Losers

The Best Five

• NIIT Technologies: The Delhi-based IT solution provider reported healthy financials in the quarter ended March as well as a robust pipeline of orders for the next year.
• HEG & Graphite India: The Chinese government’s decision to shut down polluting units triggered a rally in the stock of these graphite electrode makers.
• Tata Elxsi: A good performance in the March quarter, coupled with reports of new technologies being developed by the company, led to a rally.
• Lakshmi Machine Works: Robust revenue and profit growth in the March quarter and hopes of a recovery in the textile sector helped the company.

The Worst Five

• Reliance Naval and Engineering: Substantial erosion in the net worth and concerns raised by its auditors.
• Hindustan Construction Company: Failed to repay bank debt and environmental concerns regarding its Lavasa project.
• Manpasand Beverages: Sudden resignation of its auditors ahead of the company’s results without citing any reason.
• Reliance Communications: A delay in closing of the deal with Reliance Jio Infocomm Ltd. for sale of the wireless business of the beleaguered company.
• Jet Airways: The company suffered a surprise loss of Rs 1,036 crore in the quarter ended March. The revenue also declined to Rs 5,924.85 crore.