These 10 smallcap stocks hit new highs, zoom over 100% in FY24 so far

Shares of Force Motors, Sanghvi Movers (SML), Voltamp Transformers, Time Technoplast, Apar Industries, Dixon Technologies, Jindal Stainless (JSL), Chalet Hotels, Deep Industries and KEI Industries are 10 stocks from the S&P BSE Smallcap index which have zoomed over 100 per cent during the financial year 2023-24 (FY24).

These stocks are currently trading at their respective new highs on the BSE. In comparison, the S&P BSE Sensex has rallied 23 per cent, while, the S&P BSE Midcap index surged 63 per cent and the S&P BSE Smallcap index soared 60 per cent thus far in FY24.

Among these 10 stocks, Force Motors has zoomed 516 per cent, while, SML, Voltamp Transformers and Time Technoplast recorded returns between 243 per cent and 286 per cent. The remaining six stocks have appreciated in the range of 111 per cent to 188 per cent.

Shares of Force Motors have zoomed 65 per cent in the past six weeks after the National Stock Exchange (NSE) has admitted the equity shares of the company for dealings on the NSE (Capital Market Segment) with effect from February 14, 2024. On October 25, 2023, the trading of Force Motors was stopped on the NSE, the exchange data shows.

Force Motors, the Abhay Firodia group company, offers a range of products including light commercial vehicles (LCV), multi-utility vehicles (MUV), small commercial vehicles (SCV), special vehicles (SV) and agricultural tractors. The primary brands in LCVs and MUV’s include Traveller, Urbania, T3 Buses, Trax, Citiline and Gurkha, while popular brands in tractors subsume Balwan, Orchard, Abhiman and Sanman.

For the first nine months (April to December) of financial year 2023-24 (9MFY24), Force Motors had reported net profit of Rs 264.97 crore, as compared to Rs 2.89 crore in 9MFY23. In the entire previous fiscal FY23, the company had reported net profit of Rs 152.05 crore. The company’s revenue in 9MFY24 jumped 41 per cent year-on-year to Rs 4,981 crore from Rs 3,538 crore in 9MFY23. 

Moreover, shares of SML zoomed 286 per cent in FY24 as the company reported a strong 79 per cent YoY jump in profit after tax at Rs 140.19 crore in 9MFY24, as compared to Rs 78.11 crore in the same period last fiscal. Income from operations grew 37.7 per cent YoY at Rs 453.08 crore.

SML is engaged in the supply of medium and heavy-duty cranes on rental basis to private and public sector undertakings. On Monday, the company incorporated its wholly wwned subsidiary namely "Sangreen Renewables Private Limited". The company will carry on the business related to providing full-fledged turnkey services to Independent Power Producers (IPP) right from conceptualization to commissioning of wind turbine generators, SML said.

The increasing popularity of crane rental services throughout the country is driving the market, with enduser industries, including oil and gas, mining, automotive and transportation, utilising cranes. In addition, the substantial growth of the Indian real estate sector is generating a surge in demand for crane products.

With the continued government focus on infrastructure development, demand for cranes has increased and is expected to remain buoyant over the medium term. Wind sector is the major contributor to SML’s revenue, where the actual execution is lower than renewable purchase obligation (RPO) targets set by the government.

Additionally, the Indian Government’s target of achieving 500 GW of clean energy by 2030 with wind power contributing 140 GW, presents an opportunity for the heavy equipment and machinery industry to expand its business in the wind power sector. The increase in demand for wind turbines and related equipment creates a potential market for companies to offer crane rental services for installing, maintaining and repairing wind turbines, SML said in its FY23 annual report.

On the other hand, shares of Voltamp Transformers have surged 247 per cent in FY24 on strong earnings and healthy business outlook. In 9MFY24, the company’s operating profit jumped 62 per cent year-on-year (YoY), while EBITDA margin improved to 19.93 per cent from 14.6 per cent in 9MFY23.

The management said the profitability during the current year is better than budgeted numbers, largely on the back of vendors passing on the benefit of softening raw material prices and also effect of operating leverage. In the run up to the 2024 general election, there is likely to be a slowdown in ordering of the government funded projects during the first half of FY2024-2, the company said.