A sharp rebound in India’s smallcap stocks after the severe March selloff has produced several multibagger returns in just two months, even as the broader market stays under pressure. Data from Ace Equity showed stocks such as Sterlite Technologies, MTAR Technologies, HFCL and Nintec Systems rose between 100% and 134% from their March lows. Sterlite Technologies gained about 134%, MTAR Technologies nearly 129%, HFCL over 108% and Nintec Systems more than 111%. Other names including Sigma Advanced Systems, Mrugesh Trading and United Foodbrands also more than doubled. The Nifty Smallcap 100 had dropped nearly 10% in March amid global tensions, higher crude prices and foreign investor outflows. Valuations compressed sharply during the correction. The recovery reflects improved risk appetite, stabilising oil prices, stronger earnings and renewed stock selection. Brokerage JM Financial noted that midcap and smallcap valuations have rebounded but remain below FY26 averages, indicating selective opportunities. Hopes of a US-Iran deal eased crude prices somewhat, though pressure on India’s external account continues. SIP inflows have stayed resilient and domestic investors have returned selectively to midcaps and smallcaps. White Oak Capital CEO Aashish P Somaiyaa said the rally is driven by stock-specific earnings rather than broad speculation. Foreign investors have also increased exposure to select companies with strong results. Analysts caution that the next move depends on earnings, management commentary and global developments. Crude oil remains a key risk, with Brent having reached nearly $120 per barrel earlier. JM Financial reported foreign investors sold a net $7.3 billion of Indian equities in April. Sectors like autos and pharma recovered strongly while banks lag due to ongoing foreign selling. Smallcaps remain prone to sharp swings given lower liquidity.
