Smallcap index soars 2%; Gabriel, Avanti, Sarda Energy hit multi-year highs

However, thus far in the calendar year 2025, the BSE Smallcap index has underperformed the market by falling 20%, as against 14% decline in BSE Midcap index and 4% drop in BSE Sensex.

The BSE Smallcap index surged over 2 per cent on the BSE in Tuesday’s intra-day trade backed by a sharp rally of up to 20 per cent in select shares of smallcap companies.

 

Uttam Sugar Mills, Mastek, Carysil, Centum Electronics, Talbros Automotive Components, Morepen Laboratories, Sasken Technologies and Triveni Turbine from the BSE Smallcap index surged in the range of 10 per cent to 20 per cent. Avanti Feeds, Blue Jet Healthcare, India Shelter Finance Corporation, Gabriel India and Sarda Energy & Minerals from the index hit multi-year highs in intra-day trade today.

 

At 01:58 PM; the BSE Smallcap index, the top gainer among broader indices, was up 2.3 per cent. In comparison, the BSE Sensex and BSE Midcap were up 1.3 per cent and 1.7 per cent, respectively. However, thus far in the calendar year 2025, smallcap index has underperformed the market by falling 20 per cent, as against 14 per cent decline in Midcap index and 4 per cent drop in the Sensex.

 

 

Today's up move in Indian equities was attributed to a strong finish by the US markets on Monday, ahead of talks between the US President Donald Trump and Russian President Vladimir Putin aimed at ending the Ukraine war. Meanwhile, the US Treasury Secretary said he is "not worried" about the recent market downturn, and China announced plans featuring measures to boost wages and stabilize stock and real estate markets.  Read: Mastek share price snaps 5-day losing run, surges 19% on heavy volumes

 

Broad indications are that the market has bottomed out even though further corrections cannot be completely ruled out. Positive domestic cues like rebound on FY25 Q3 GDP growth to 6.2 per cent, spurt in the IIP by 5.1 per cent, increase in gross tax collection by 16 per cent, declining trade deficit and more importantly decline in CPI inflation to 3.6 per cent are positive macro trends which augur well for the market, said Dr. V K Vijayakumar, Chief Investment Strategist of Geojit Financial Services.

 

But these domestic tailwinds are not strong enough to take the market to higher levels on a sustained basis since the global headwinds from tariff wars will counter the domestic tailwinds. Hopes of growth revival in China coupled with the cheap valuations of Chinese stocks have triggered foreign capital inflows into China. This has triggered foreign institutional investor (FII) selling in emerging markets, particularly India where the valuations are relatively expensive. Market is likely to move in a range in the near-term without a sharp break out or break down, believes Dr. V K Vijayakumar.

 

Among individual stocks, Uttam Sugar Mills was locked in the 20 per cent upper circuit at Rs 230.75 on the BSE after India Ratings and Research (Ind-Ra) said the company’s earnings before interest, tax, depreciation and amortisation (Ebitda) was likely to recover in FY26, led by an increase in both sugar and ethanol sales, an uptick in sugar prices as well as its capex towards improving operational efficiency.

 

While ethanol sales remaining flat at 45.5 million litres (mnL) in 9MFY25 (9MFY24: 46.8mnL), the allocation in the first two cycles of ethanol supply year 2025 (ESY25) is significantly higher, indicating a revival after the government lifted the restrictions of diversion of sugar towards ethanol, the rating agency said in its rationale.

 

While the lower recovery could lead to reduced production in FY25, Ind-Ra expects the net working capital to remain range-bound given the lower sugar sales. This, coupled with a lower Ebitda, could lead to an increase in the net leverage in FY25. With a gradual reduction in the inventory and the recovery in the Ebitda, the net leverage is likely to improve in FY26.

 

Shares of Morepen Laboratories soared 18 per cent to Rs 50.55 after the company said it rolled out ‘Empamore.’ Empamore is used to treat type 2 diabetes mellitus (T2DM), heart failure with reduced ejection fraction (HFrEF), and chronic kidney disease (CKD).

 

“Morepen manufactures Empagliflozin (API) in its USFDA-approved facilities and already has a European DMF,” the company said, in a statement.

 

Shares of Gabriel India hit a new high of Rs 573.80, as they surged 12 per cent on expectations of healthy earnings growth.

 

On the change in strategy, the company’s entry into the high growth “sunroof” product line is positive and would be a major value driver. Further, diversification into new product line partnerships/ acquisitions would keep growth strong. After the recent acquisition of Marelli Motherson Auto Suspension Parts Private Limited (MMAS), another two-three mergers & acquisitions (M&A) are expected in the next three-four years, as per analysts at Anand Rathi Share and Stock Brokers.

 

Analysts at Elara Capital remain positive on Gabriel India, primarily due to increased focus on product diversification, starting with the sunroof segment. The company will remain a beneficiary of the ongoing 2W growth (it has a 30 per cent market share as on Q3FY25) and high growth in the e2W segment (80 per cent market share in electric vehicle (EV) two-wheeler suspension business).

 

Avanti Feeds stock hit a multi-year high at Rs 930, as it rallied 4 per cent on the BSE in intra-day trade. The stock of the animal feed company was trading at its highest level since January 2018. It was inching towards its record high level of Rs 1,000 touched on November 13, 2017.

 

In the past one month, the market price of Avanti Feeds has zoomed 40 per cent on expectations of strong earnings.

 

In the first nine months (April to December 2024) of the financial year 2024-25 (9MFY25), Avanti Feeds reported 36 per cent year-on-year (Y-o-Y) jump in profit before tax (PBT) to Rs 526 crore from Rs 386 crore in the corresponding period of the previous year, mainly due to increase in revenue and decrease in raw material costs and better overhead absorption.

 

The total income increased to Rs 4,343 crore from Rs 4,185 crore. Earnings before interest, tax, depreciation and amortisation (Ebitda) margins improved to 13.53 per cent from 10.49 per cent.

 

The major raw material prices are fish meal, soya bean meal, and wheat flour. The noticeable development in the December quarter, meanwhile, was softening of two major raw materials that are fish meal and soya bean meal prices resulting in improvement in the profitability. The prices of these raw materials keep fluctuating since their production is based on agriculture and fish catches from the ocean, the company said.

 

The management said, overall, the global market for shrimps was expected to be safe and stable in 2025 compared to 2024 with a marginal increase of about 5 per cent anticipated. The focus is on demand for value added products, which is gradually increasing and processes are seeing better margins in value added products.