BSE Smallcap index hits new high; up 50% from November 2016 low

174 stocks from the S&P BSE Smallcap index have become multi-baggers and rallied by more than 100% since November 22, 2016

Shares of smallcap companies continued their upward movement with the S&P BSE Smallcap index hitting a new high of 17,240 on the BSE in intra-day on Tuesday.

The index has rallied 50% from its 52-week low of 11,463 touched on November 22, 2016 in intra-day trade. On 8 November 2016, the Government of India announced the demonetisation, commonly called notebandi, of all Rs 500 and Rs 1,000 banknotes.

As many as 174 stocks from the S&P BSE Smallcap index have become multi-baggers and rallied over 100% since November 22, 2016. Of these 47 stocks zoomed more than 200% each.

Indiabulls Ventures, HEG, Sanwaria Consumers, Graphite India, Venky’s India, Avanti Feeds, ITI and V2 Retail among those have seen their market value appreciation between 400% and 1350% during the period.

The strong inflows of more than Rs 1-lakh crore by the domestic mutual funds have led the rally in equity markets. The mutual funds had made net investments of Rs 1.1 lakh crore in equities market between November 22, 2016 and October 17, 2017, the Securities and Exchange Board of India (Sebi) data shows.

Among the individual stocks, Indiabulls Ventures market price appreciated by 14 times from Rs 19.35 to Rs 280 today. It hit a record high of Rs 301 on Wednesday, October 18, 2017 in intra-day trade.

The company engaged in financial services business had posted consolidated net profit of Rs 50.27 crore in June quarter (Q1FY18) against Rs 20.41 crore in the same quarter year ago.

Last month, the company decided to raise upto Rs 2,000 crore, through issue of its equity shares to its existing shareholders on rights basis (rights issue), to meet the funding requirements and to support future growth of consumer finance and assets reconstruction businesses carried out by the company, through its subsidiary companies.

HEG and Graphite India, both engaged in graphite electrode business, have rallied more than 500% on expectation that the recent Industry consolidation is to improve capacity utilization, going forward.

“The recent few years have been challenging for the graphite electrode industry due to lower demand and realization globally, coupled with oversupply from China. However, the momentum has shifted in FY2018. China shutting down selected steel and electrode capacities on account of environmental considerations has led to an increase in the steel output in other EAF steel producing countries. These developments supported the recovery of volume and price of graphite electrodes,” K K Bangur, Chairman of Graphite India said while announcing September quarter (Q2FY18) results.

In Q2FY18, Graphite India delivered a sales growth of 36% y-o-y which was driven by an increase in volume coupled with improved realizations. Earnings before interest, tax, depreciation and amortization (EBITDA) margin expanded from 11% in Q2 FY2017 to 32% in Q2FY18. Capacity utilization increased from 75% to 89% y-o-y.

While the momentum in improvement of realization is expected to continue, the concern going forward is rise in the prices of major inputs and reduced availability, added K K Bangur.

Graphite India surpassed its entire previous fiscal net profit of Rs 112 crore during first half of current fiscal. It recorded profit of Rs 119 crore in first half (April – September 2017) against Rs 26.93 crore during the same period last fiscal.

Company	22/11/2016	LTP	% chg
Indiabulls Vent.	19.35	280.00	1347
HEG	147.25	1303.10	785
Sanwaria Consum.	2.63	17.93	582
Graphite India	73.70	459.00	523
Venky's (India)	411.90	2348.80	470
Avanti Feeds	502.45	2674.20	432
ITI	28.90	149.60	418
V2 Retail	101.20	523.85	418
Bhansali Engg.	22.30	110.45	395
Gravita India	33.05	162.95	393
Adani Transmissi	46.60	228.20	390
Rain Industries	47.30	226.70	379
Bombay Dyeing	42.85	204.00	376
TVS Electronics	90.80	427.00	370
Shiva Cement	8.29	37.75	355
LTP :Last traded price on BSE in Rs at 10:02 AM