Small caps bounce hard in May, but profits still elusive

3 Jun 2025 , 12:09 PM

SMALL CAPS – PROFIT PERFORMANCE THE OVERHANG

The relatively tentative performance of small caps is evident from the quarterly numbers. For Q4FY25, while large caps saw 10% profit growth and mid-caps saw 19% profit growth; the small caps saw profits contract by -19%. For May 2025, the small cap index gave returns of 6.87%, while full year returns at 5.94% continue to be very tepid. In an uncertain macro environment, the investors continue to be unsure about small caps, while alpha hunting is being restricted to the mid-caps. Here is a quick look at small caps in the month of May 2025 from different perspectives.

SMALL CAP MOMENTUM MODEST IN MAY 2025

In terms of 1-month returns, the Nifty Small cap 100 gained 6.87% in May 2025. Out of the 92 eligible stocks in the index, 73 stocks gave positive returns, while 19 stocks gave negative returns in May 2025. Here are the top-15.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
IFCI	67.00	63.84%	21.63%	91.40	36.20	85.08%	26.70%
GRSE	2,999.00	57.83%	113.88%	3,147.00	1,148.10	161.21%	4.70%
ZENTEC	2,137.10	43.71%	126.55%	2,627.00	893.95	139.06%	18.65%
ITI	346.60	38.64%	25.21%	592.70	210.00	65.05%	41.52%
RAILTEL	395.90	32.40%	-3.05%	617.80	265.50	49.11%	35.92%
BEML	4,225.00	31.60%	-5.10%	5,488.00	2,350.00	79.79%	23.01%
ANGELONE	3,035.00	27.66%	20.45%	3,503.15	1,941.00	56.36%	13.36%
RPOWER	58.09	27.33%	107.22%	60.50	23.30	149.31%	3.98%
TTML	72.69	27.12%	-0.60%	111.40	50.10	45.09%	34.75%
RITES	277.00	23.11%	-60.17%	398.45	192.40	43.97%	30.48%
IRCON	190.35	22.72%	-29.15%	351.60	134.24	41.80%	45.86%
KEC	830.75	21.09%	13.77%	1,313.25	627.45	32.40%	36.74%
NBCC	123.35	19.41%	-18.31%	139.83	70.80	74.22%	11.79%
TITAGARH	891.45	18.70%	-34.88%	1,896.95	654.55	36.19%	53.01%
ANANTRAJ	561.00	16.93%	45.62%	947.90	319.15	75.78%	40.82%

Data Source: NSE

In May 2025, 6 stocks have given returns of over 30%, while 36 stocks have given double-digit returns. In terms of sectoral mix; the top-15 had 4 Railway stocks; 3 defence stocks; and 2 financial sector plays. Others were bottom-up plays. The worst performers in April 2025 by monthly returns were KFIN Technologies, Chambal Fertilizers, Aadhar Housing, Neuland Laboratories, Navil Fluorine, Devyani International, and Piramal Pharma.

DID SMALL CAPS DELIVER ON 1-YEAR RETURNS?

For the 92 small cap stocks with full data, the average 1-year return was 5.94%. A total of 53 stocks gave positive 1-year returns, while 39 stocks delivered negative returns for May 2025. Here are the top-15.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
ZENTEC	2,137.10	43.71%	126.55%	2,627.00	893.95	139.06%	18.65%
GODFRYPHLP	8,702.50	1.09%	114.03%	9,248.00	3,310.00	162.92%	5.90%
GRSE	2,999.00	57.83%	113.88%	3,147.00	1,148.10	161.21%	4.70%
RPOWER	58.09	27.33%	107.22%	60.50	23.30	149.31%	3.98%
FSL	371.00	12.24%	104.11%	422.30	176.25	110.50%	12.15%
NEULANDLAB	11,510.00	-8.54%	84.83%	18,100.00	5,540.10	107.76%	36.41%
KAYNES	5,968.00	1.90%	82.41%	7,822.00	2,814.00	112.08%	23.70%
AMBER	6,474.00	0.74%	78.61%	8,177.00	3,310.00	95.59%	20.83%
MCX	6,613.00	5.54%	75.33%	7,048.60	2,917.85	126.64%	6.18%
PCBL	396.70	9.78%	66.78%	584.40	209.00	89.81%	32.12%
RADICO	2,547.00	0.28%	55.10%	2,665.00	1,429.85	78.13%	4.43%
NH	1,738.00	-0.62%	53.71%	1,871.60	1,080.00	60.93%	7.14%
WELCORP	932.90	16.17%	49.19%	938.80	440.15	111.95%	0.63%
AFFLE	1,760.00	7.62%	48.39%	1,884.00	1,060.00	66.04%	6.58%
ASTERDM	561.00	5.68%	48.10%	609.50	311.10	80.33%	7.96%

Data Source: NSE

On a yoy basis, the leaders were dominated by a mix of 3 Healthcare plays (Neuland Labs, Narayana Hrudayalaya, Aster DM), 2 FMCG stocks (Godfrey Phillips, Radico), 2 EMS companies (Kaynes, Amber), and 2 Defence plays (Zen Technologies, Garden Reach Ship Builders). The remaining stocks were largely spread out across different sectors. At the bottom are companies like Tejas Networks, Titagarh Wagons, Hindustan Copper, Birlasoft, Swan Energy, and IRCON.

HOW RESILIENT WERE SMALL CAPS IN LAST ONE YEAR?

In terms of bounce from lows, small caps bounced 26.97%. Total of 11 stocks bounced over 100% from the lows, while 83 jumped over 20%. Top-15 average bounce was 125.09%.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
PGEL	771.10	-11.07%	-70.17%	1,054.20	231.11	233.65%	26.85%
GODFRYPHLP	8,702.50	1.09%	114.03%	9,248.00	3,310.00	162.92%	5.90%
GRSE	2,999.00	57.83%	113.88%	3,147.00	1,148.10	161.21%	4.70%
RPOWER	58.09	27.33%	107.22%	60.50	23.30	149.31%	3.98%
ZENTEC	2,137.10	43.71%	126.55%	2,627.00	893.95	139.06%	18.65%
MCX	6,613.00	5.54%	75.33%	7,048.60	2,917.85	126.64%	6.18%
KAYNES	5,968.00	1.90%	82.41%	7,822.00	2,814.00	112.08%	23.70%
WELCORP	932.90	16.17%	49.19%	938.80	440.15	111.95%	0.63%
FSL	371.00	12.24%	104.11%	422.30	176.25	110.50%	12.15%
DATAPATTNS	2,843.00	11.91%	-0.24%	3,655.00	1,351.15	110.41%	22.22%
NEULANDLAB	11,510.00	-8.54%	84.83%	18,100.00	5,540.10	107.76%	36.41%
AMBER	6,474.00	0.74%	78.61%	8,177.00	3,310.00	95.59%	20.83%
PCBL	396.70	9.78%	66.78%	584.40	209.00	89.81%	32.12%
IFCI	67.00	63.84%	21.63%	91.40	36.20	85.08%	26.70%
ASTERDM	561.00	5.68%	48.10%	609.50	311.10	80.33%	7.96%

Data Source: NSE

On resilience score, the list was once again dominated by stocks in the defence, EMS, healthcare, and the BFSI space. The remaining stocks were largely spread out and roughly mirrored the 1-year return rankings list. The list at the bottom included stocks like; RK Forge, Bata India, Tejas Networks, GE Shipping, Crompton Greaves, and Tata Chemicals.

HOW SMALL CAPS FARED ON THE SWING FACTOR?

In terms of proximity to the peak, the small cap index was 9.30% short of the peak. A total of 14 stocks are less than 10% to the peak while 34 stocks are over 30% off the peak. That shows a huge divergence in performance of the small caps.

Stock Symbol	Market Price	1-Month Return	1-Year Return	52-week High	52-week Low	Bounce from Low	Distance to High
WELCORP	932.90	16.17%	49.19%	938.80	440.15	111.95%	0.63%
RPOWER	58.09	27.33%	107.22%	60.50	23.30	149.31%	3.98%
MANAPPURAM	237.67	-0.10%	34.93%	247.60	138.35	71.79%	4.01%
RADICO	2,547.00	0.28%	55.10%	2,665.00	1,429.85	78.13%	4.43%
GRSE	2,999.00	57.83%	113.88%	3,147.00	1,148.10	161.21%	4.70%
GODFRYPHLP	8,702.50	1.09%	114.03%	9,248.00	3,310.00	162.92%	5.90%
MCX	6,613.00	5.54%	75.33%	7,048.60	2,917.85	126.64%	6.18%
NUVAMA	7,167.50	11.97%	37.31%	7,648.00	4,120.00	73.97%	6.28%
AFFLE	1,760.00	7.62%	48.39%	1,884.00	1,060.00	66.04%	6.58%
NH	1,738.00	-0.62%	53.71%	1,871.60	1,080.00	60.93%	7.14%
LAURUSLABS	610.50	-0.48%	39.50%	660.90	385.45	58.39%	7.63%
ASTERDM	561.00	5.68%	48.10%	609.50	311.10	80.33%	7.96%
RAMCOCEM	970.00	-0.44%	26.62%	1,060.00	700.00	38.57%	8.49%
KARURVYSYA	222.00	1.76%	12.70%	246.00	164.10	35.28%	9.76%
NAVINFLUOR	4,259.00	-4.45%	30.11%	4,748.00	2,875.95	48.09%	10.30%

Data Source: NSE

In terms of proximity to the peak, the list is dominated by Healthcare (Narayana Hrudayalaya, Laurus Labs, Aster DM); financial inclusion (Manappuram, MCX, Nuvama, Karur Vysya); and FMCG Companies (Radico Khaitan, Godfrey Phillips). Companies farthest from the peak were a mixed bag of stocks like Titagarh Wagons, Tejas Networks, HFCL, Birlasoft, Sonata Software, and Swan Energy. Despite the recent improvement, the swing factor for small cap companies leaves a lot to be desired. The themes in small caps are gravitating towards specialty chemicals, healthcare, defence, and financial inclusion.