In this article, we are going to discuss about the best small cap index in India in 2023. You can also visit our post best stocks under RS 500 to invest in 2023 if you are a beginner and and do not want to put a big sum at once.
Small-cap stock investors frequently worry about the dependability of their investments. Regardless of whether they are classified as large cap, mid cap, or small cap firms, the fundamental strength of the specific stocks picked is what makes them reliable. In essence, identifying firms with strong underlying fundamentals is the key to assuring safety, regardless of their market value.
What are Small Cap Stocks?
Small Cap stocks are, by definition, those with a market valuation between 500 and 5000 crores. The Market Cap represents the total market value of a company’s outstanding stock shares.
That is, Market Capitalization, often known as cap, is equal to the current market price per share multiplied by the total number of the company’s outstanding shares.
Are small Cap index safe bets?
Indeed, investing in small-cap stocks entails higher risk due to limited liquidity, lower market visibility, and increased volatility. However, these businesses often possess untapped potential and innovative business concepts. They also have the ability to capitalize on emerging trends. Small-cap stocks in India span various industries, including technology, healthcare, and consumer goods, among others. This provides investors with a diverse range of investment opportunities.
Since we are investing in small cap stocks, we need to look at the following given factors. They are: Its volatility and unpredictability nature, company’s management team, track record, competitive advantage, and growth potential within its respective industry. Diversification is key to managing risk, so it is advisable to spread investments across multiple small-cap stocks to mitigate the impact of any individual stock’s performance.
In this article, we are going to list various small- cap stocks that carry potential for substantial gains. The stocks are:
Let’s discuss about the fundamentals and financials of some of the stocks.
EKI Energy Services Ltd
The first stock in our list is EKI Energy Services Ltd. The stock demonstrates outstanding ROE at 176.49% and ROCE at 236.53%. Over the past year, the company experienced a remarkable 843% increase in annual revenue, reaching Rs 1,801.3 Crores. Furthermore, the annual net profit surged by an impressive 1,950.6% during the same period, amounting to Rs 383.4 Crores.
With an EPS Rank of 84, the firm has a robust balance sheet and no debt, allowing it to record steady profits growth across business cycles, making it a stock to carefully research.
Ksolves India Ltd
The second stock in our list of best small cap stocks is Ksolves India Ltd. The stock is supported by remarkable ROCE of 170% and ROE of 128%. Over the past year, the company witnessed a substantial 63.3% increase in annual revenue, reaching Rs 78.9 Crores. The annual net profit also experienced a significant growth of 57.2% during the same period, amounting to Rs 24.7 Crores. Furthermore, the stock price surged by an impressive 166.4% and outperformed its sector by 159.8% in the past year.
A decent EPS Rank of 63 places the stock in a position to fit in the investor’s basket as it enables the company to report steady earnings growth across business cycles and has a robust balance sheet and debt-free status.
Gujarat Themis Biosyn Ltd
Gujarat Themis Biosyn Ltd is the third stock in our list. Benefitting from robust profitability indicators, specifically a remarkable ROCE of 61.1% and an impressive ROE of 45.9%, the company experienced a substantial 91.4% surge in its stock price, outperforming the industry by 75.5% in the past year. Furthermore, the company achieved a noteworthy 30.4% increase in annual revenue, reaching Rs 155 Crores. Additionally, its net profit witnessed a significant growth of 32.9%, amounting to Rs 58 Crores during the same period.
The firm has shown a noteworthy profit increase of 89.52% and a significant sales growth of 40.91% over the previous three years with a steady development trajectory and a manageable level of debt.
Jyoti Resins and Adhesives Ltd
The fourth stocks in the list of Best small cap index is Jyoti Resins and Adhesives Ltd. Backed by outstanding ROCE of 72.9% and ROE of 55.1%, the stock exhibited a remarkable 73.5% surge in its stock price, surpassing its sector’s performance by 60.6% in the previous year. Furthermore, the company achieved substantial growth with a significant 42.1% increase in annual revenue, amounting to Rs 263.5 Crores. Additionally, the annual net profit soared by an impressive 135% in the last year, reaching Rs 46.4 Crores.
With minimal debt, the business has demonstrated remarkable profit growth of 113% CAGR over the past five years, coupled with a strong 38.36% increase in sales during the last three years.
K.P. Energy Ltd
K.P Energy exhibited exceptional growth in the previous year, with its stock price soaring by 219.6% and outperforming its sector by 165.8%. The company also experienced a substantial 74.3% increase in annual revenue, amounting to Rs 442.4 Crores. Moreover, the annual net profit rose by an impressive 138.4% to Rs 43.9 Crores. The company’s profitability ratios remain strong, with a ROCE of 51.8% and a ROE of 42.4%.
With a Debt to Equity Ratio of 0.3, indicating financial health, the company achieved impressive profit growth of 87.5% CAGR over five years and maintained consistent revenue growth of 16.49% over three years.
KPI Green Energy Ltd
The next stock in the list of Best small cap stocks is KPI Green Energy Ltd. The company boasts exceptional financials with strong profitability ratios, including a ROCE of 24.7% and ROE of 53.4%. Furthermore, the company experienced a significant 179.5% increase in annual revenue, reaching Rs 647 Crores in the last year. The annual net profit also surged by an impressive 153.5% during the same period, amounting to Rs 109.6 Crores. Moreover, the stock price demonstrated a substantial rise of 90.2%, outperforming its sector by 90.1% in the past year.
Despite a concerning high debt-to-equity ratio of 159%, the company’s EPS Rank of 99, which is an outstanding score reflecting consistent earnings, positions it as a stock worth staying invested in.
Cigniti Technologies Ltd
The small cap index we are going to discuss next is Cigniti Technologies Ltd. The company’s excellent stock performance, which saw a 92.6% increase and beat its industry by 86% in the last year, is proof of its strong fundamentals. Furthermore, the company’s solid profitability figures, which include a ROCE of 38.2% and a ROE of 32.1%, have helped it to boost its yearly sales by a sizable 32.4%, to Rs 1,662.3 Crores in the most recent year. Additionally, throughout that time the company’s yearly net profit increased significantly by 83.5%, reaching Rs 168.3 Crores.
Debt-free with a strong balance sheet, the company ensures stable earnings growth and attracts investors with its impressive EPS Rank of 89.
Bottom Lines
With this, we come to the end of our article about best small index in India in 2023. These businesses have the potential for rapid stock price increases as they expand and gain market recognition. This can result in significant profits for investors who capitalize on their growth. Moreover, the relatively lower analyst coverage on small-cap stocks can present opportunities for diligent investors to discover undervalued gems in the market. Considering risk factors, before making investing selections in small-cap companies, it is essential to do due diligence, conduct extensive research, and carefully analyse the financials, company prospects, and competitive environment.
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Disclaimer
The blog is meant for informational purposes and serves the general analysis of the stocks. Contents provided here are based on careful research and analysis utilizing the fundamental and technical indicators over a period of time. The post does not consist any direct recommendation about Investing or trading in the securities market. Thorough research and careful consideration are necessary for individuals to fulfill their personal responsibility in making financial decisions. Seeking professional advice before making any financial decisions is always advisable.
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