BSE Smallcap index nears record high; 17 stocks freeze at upper circuit

BSE SmallCap index today: The SmallcCap index hit a high of 46,426.72 in the intraday trade, and was less than 1 per cent away from its record high

Shares of smallcap companies were in demand on Tuesday with the S&P BSE Smallcap index gaining nearly 1 per cent, led by a strong rally in telecom, power, shipbuilding, dairy products, and iron & steel products' related stocks.

Oriental Aromatics, Tejas Networks, Tata Teleservices Maharashtra (TTML), Authum Investment & Infrastructure, Hariom Pipe Industries, Hatsun Agro Products, and Omaxe rallied between 10 per cent and 20 per cent in the intraday trade today. The strong rally in Tejas Networks and Hatsun Agro Products was seen after these companies reported robust earnings for the March 2024 quarter (Q4FY24).

At 11:38 am, the S&P BSE Smallcap index, the top gainer among broader indices, was up 0.86 per cent at 46,404.96 as compared to 0.22 per cent and 0.41 per cent gain in the S&P BSE Sensex and S&P BSE Midcap index, respectively.

The smallcap index hit a high of 46,426.72 in the intraday trade, and was less than 1 per cent away from its record high of 46,821.39 touched on February 7. The index has recovered 14 per cent from its low of 40,641.67 hit on March 13.

A total of 18 stocks from the index were locked in their respective upper circuits with only buyers seen on these counters. The list includes Tejas Networks, Lloyds Enterprises, Shakti Pumps, Transformers and Rectifiers (India) (TRIL), Inox Wind Energy, Inox Green Energy Services, KPI Green Energy, and Waaree Renewable Technologies.

In March, most of the small and midcap had corrected as much as 30-50 per cent prompted by market regulator Sebi's warning of expensive valuations in the space. The volatiltiy in the pack, analysts had said, could act as an opportunity to pick up stocks selectively for a favourable risk-reward ratio.

Meanwhile, macroeconomic factors have been favourable in domestic as well as external trade. The positive expectations from current account deficit or CAD by the CMIE for the March 2024 quarter provides comfort. Above-normal monsoon rain outlook by the IMD (only for the second time in the recent decade) should also help revive rural markets and ease food inflation.

"While interest rate reduction seems to be delayed, subject to electoral outcome, private capex is expected to improve. The general elections in India in Apr-Jun 2024 are expected to favour the ruling Bharatiya Janata Party, in terms of higher seat wins, as per prepoll surveys, while the vote share is expected to be flat vs. last time," said InCred Equities in a report.

Among individual stocks, Tejas Networks hit a new high of Rs 1,086.90 as they rallied nearly 20 per cent on the BSE in Tuesday’s intra-day trade amid heavy volumes. In the past two trading days, the stock of the Tata Group company has zoomed 40 per cent after it reported robust earnings with a profit after tax (PAT) of Rs 146.80 crore for the quarter ended March 2024 (Q4FY24). The company had posted a net loss of Rs 11.5 crore in the year-ago quarter. READ MORE

Tejas Networks’ net revenue rose over four-fold at Rs 1,326.90 crore in Q4FY24, compared to Rs 299.30 crore in Q4FY23. The company has a strong order book position of Rs 8,221 crore.

That apart, shares of TTML, another Tata Group company, rallied 15 per cent on the back of a 10-fold jump in average trading volumes. A combined 34.91 million shares had changed hands on the NSE and BSE till the time of writing of this report. The board of directors of the company is scheduled to meet on Thursday, April 25, to consider Q4FY24 results.

Furthermore, shares of Hatsun Agro Products (HAP) surged 15 per cent to Rs 1,174.65 after the company’s PAT more than doubled at Rs 52.16 crore in Q4FY24. The dairy products company had posted PAT of Rs 24.99 crore in Q4FY23. READ MORE

Revenue from operations grew 14.38 per cent year-on-year to Rs 2,406.87 crore from Rs 1,789.46 crore in the previous year quarter. Procurement of milk registered a growth of 39.04 per cent in FY24 over FY23.

Strong sales recovery in the domestic market post Covid with good summer sales led to good sales volume. All business verticals did well with leading brands registering healthy sales growth. HAP’s retail expansion in the last two years helped reach customers in new markets like Maharashtra, Orissa, West Bengal and Madhya Pradesh and also supported existing strong bases in South India, the management said.

HAP, in the last financial year, had invested about Rs 550 crore across new manufacturing facilities for capacity expansion in Curd and Milk Products and in market assets. The new capacities will further support the company’s sales plans for FY 2024-25, it added.