RVNL, IRCON, Mazagon: 12 multibagger smallcap stocks that jumped over 20% in September

A total of twelve multibagger smallcap stocks from the BSE Smallcap index have climbed over 20 per cent in September, taking their year-to-date rise to 100-600 per cent. They included Transformers & Rectifiers (India) (TRIL), Jai Balaji Industries, Ashapura Minechem, Responsive Industries and Chennai Petroleum Corporation (CPCL). Others included Rail Vikas Nigam Ltd (RVNL), Rane (Madras), IRCON International, Prakash Industries, Mazagon Dock Shipbuilders and GE T&D India. All of these stocks hit their 52-week highs this ongoing month.

The biggest jump has been seen by TRIL, whose shares are up 43.23 per cent this month. The stock has soared 198 per cent in 2023 so far. Nuvama recently met with the TRIL management. The key takeaways included the company's participation in Rs 3,700 crore worth of tenders, where success rate usually is 20–22 per cent. The company's order book stands at Rs 2,150 crore order book (1.6 times FY23 sales). It is targeting 20–25 per cent exports mix by FY26 against 7 per cent currently. Besides, the company has capex planned for solar, green hydrogen transformers.

Jai Balaji Industries has hit upper circuit limits in nine sessions this month. The stock soared 42 per cent in September so far. On September 7, the company said it does not have any undisclosed or potentially price sensitive information that is required to be disclosed to the stock exchange, which may have a bearing on the price or volumes of the company's stock.This stock has zoomed 614.28 per cent in 2023 so far.

Pravesh Gour of Swastika Investmart said: "Small-cap stocks are getting too hot and are not very safe to invest in right now. The Nifty Small Indices has already fallen 2-3 per cent from its highs, and any bad news could cause investors to sell smallcap stocks quickly, driving prices down even further. Additionally, many stocks are trading at significantly higher valuations compared to their historical averages. Consequently, it would be wise for investors to exercise caution in the near term," he said.

Gour of Swastika Investmart said elevated valuations could leave smallcap stocks vulnerable to market corrections.

Shankar Sharma, the Founder at GQuant Investech, in an interview to BT TV this week, said the disparity in the performance of smallcap and large cap indices is huge, which raises doubts over its sustainability. Sharma, who said returns by smallcap stocks in the last one year were beyond his expectations, said one must be prepared for relatively modest returns ahead.

Ashapura Minechem is up 39.84 per cent in September and 232.46 per cent overall this year. This company on Monday said its step-down subsidiary, Ashapura Holdings, concluded and signed contract for the supply of Bauxite from Guinea and Ashapura Guinea Resources SARL and another contract for iron ore from Guinea.

Responsive Industries climbed 32 per cent in September so far and is up 175.53 per cent in 2023 so far. CPCL, Rane (Madras) and RVNL gained 25-28 per cent this month. They jumped up to 160 per cent in 2023 so far.

Multibagger stocks GE T&D India Ltd, Ircon International, Prakash Industries, Mazagon Dock Shipbuilders and Aurionpro Solutions are up 20-22 per cent this month. They are up 133-256 per cent this year.

"As the rate-hike cycle seems over and with positive retail sentiment, the mid and small caps remain in favour," Motilal Oswal Securities said in a strategy note.

Sharma of GQuant Investech believes that an investor can lose money a lot easily in smallcap stocks than larger peers. He said it is easy to exit smallcap stocks when they are rising, but quite difficult when they are falling.

Also read: Updater Services IPO to open on September 25: Price band, lot size & other details

Also read: Reliance Industries, TCS, HDFC Bank: Trading strategies for 3 most-valued stocks