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Will the top 10 smallcaps and midcaps perform an encore next Samvat?

The S&P BSE MidCap and SmallCap indices have gained 19.6% and 25.6%, respectively.

, ET Bureau|
Updated: Oct 18, 2017, 10.27 AM IST
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ET takes a look at 10 outlier stocks from the midand small-cap space, explaining why they have topped the growth charts in Samvat 2073.
ET takes a look at 10 outlier stocks from the midand small-cap space, explaining why they have topped the growth charts in Samvat 2073.
Midcap and smallcap stocks have once again outperformed the benchmark indices in Samvat 2073. So far in the concluding Samvat, the S&P BSE MidCap and SmallCap indices have gained 19.6% and 25.6%, respectively, outpacing the 16.7% gains in the S&P BSE Sensex. ET takes a look at 10 outlier stocks from the mid and small-cap space, explaining why they have topped the growth charts in Samvat 2073.

AVANTI FEEDS

CMP: Rs 2,592.65 | Market-Cap: Rs 11,774 cr
P/E: 31.00 | Samvat 2073 Return (%): 384.24


The shrimp feed manufacturer has been gaining investor attention due to strong demand for shrimp globally. "Q2 and Q3 will be good for the company and in line with the Q1 results, with raw material prices remaining benign," said Depesh Kashyap, mid-cap analyst at Equirus Securities.

GRAPHITE INDIA

CMP: Rs 439 | Market-Cap: Rs 8,576 cr
P/E: 38.61 | Samvat 2073 Return (%): 456.05


The graphite electrodes maker's stock has gained due to improved industry demand-supply outlook led by closures, consolidation and reduced Chinese imports into India. Recently, brokerage Anand Rathi said it expects earnings to surge four times in FY18, and then nearly treble in FY19.

VENKY'S (INDIA)

CMP: Rs 2,400 | Market-Cap: Rs 3,380 cr
Trailing P/E: 24.89 | Samvat 2073 Return (%): 360.48


The crackdown on illegal slaughterhouses and meat shops has benefi ted Venky's India. Kotak Securities, which has a target price of `2,650 on Venky's, recently said that greater earnings visibility should drive the stock to even higher valuations.

DILIP BUILDCON

CMP: Rs 799.05 | Market-Cap: Rs 10,928 cr
P/E: 24.54 | Samvat 2073 Return (%): 241.91


Dilip Buildcon's shares have more than trebled since their debut in August 2016. The company has bagged a signifi cant number of orders and posted a strong top-line. While some analysts believe the valuations are stretched, IIFL in a recent note said that the share is attractive at 14 times estimated FY19 P/E.

RAIN INDUSTRIES

CMP: Rs 217.25 | Market-Cap: Rs 7,307 cr
P/E: 15.45 | Samvat 2073 Return (%): 314.20


It has seen the demand for calcined pet coke and coal-tar pitch continue to improve over the last few months. UHNI Dolly Khanna has raised her stake to 2.04% as of September 30 from 1.27% a quarter ago.

TVS MOTOR COMPANY

CMP: Rs 689.10 | Market-Cap: Rs 32,738 cr
P/E: 45.99 | Samvat 2073 Return (%): 68.07


Analysts believe TVS should outrun the rate of growth in the broader industry because of the success of its recent launches and strong product pipeline. Its margins are likely to reach the double-digit mark by FY19, leading to strong 37% earnings CAGR over the next two years, said Sharekhan in a recent report.

DHFL

CMP: Rs 590 | Market-Cap: Rs 18,499 cr
Trailing P/BV: 2.19 | Samvat 2073 Return (%): 79


The company is seen as a benefi ciary of the government's focus on affordable housing given its presence in tier-II and tier-III cities and lower ticket size for each account. SPA Securities in a recent note said it expects consistent performance to drive re-rating and narrow the valuation gap with peers.

TATA GLOBAL BEVERAGES

CMP: Rs 211 | Market-Cap: Rs 13,316 cr
P/E: 27.13 | Samvat 2073 Return (%): 51.47


Analysts believe prospects of Tata Global have improved due to the rationalisation of operation in many countries, favourable domestic tea prices and reduction in losses in JVs such as Starbucks and Nourischo. Furthermore, the company's market cap to sales ratio is also lower than most FMCG companies.

HEG

CMP: Rs 1,244.50 | Market-Cap: Rs 4,973 cr
P/E: 63.05 | Samvat 2073 Return (%): 616.47


The company, like Graphite India, is expected to gain from rising graphite electrode prices. Initiating coverage on HEG, Jefferies said in a recent note that it expects the company to return to profi tability in FY18, as pricing power improves in the industry.

NATIONAL ALUMINIUM COMPANY

CMP: Rs 88.80 | Market-Cap: Rs 17,164 cr
P/E: 19.10 | Samvat 2073 Return (%): 62.94


Co has been on the radar of investors due to a global uptrend in aluminium prices. "We remain positive given its long alumina position and integrated business model, with captive bauxite mines and coal linkages in place," said Antique Stock Broking, retaining a buy rating and target price of `85.

(Samvat 2073 Return is as of Monday's close; *Consensus Rating/Target Price/Forward Data Source: Bloomberg; * PE/PBV data for Dewan Housing/Venky's India on trailing basis.)
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