Smallcap shares: A notable concern is the disconnect between the benchmarks and the broader market, as selective buying in heavyweight stocks has cushioned the decline, while broader market stocks continue to face sharp corrections, said an analyst. 
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Smallcap shares: A notable concern is the disconnect between the benchmarks and the broader market, as selective buying in heavyweight stocks has cushioned the decline, while broader market stocks continue to face sharp corrections, said an analyst. Smallcap selloff: Smallcap stocks were hit hard on Monday morning, with 922 stocks from the BSE Smallcap index fell and only 15 constituents from the index were trading higher. There were concerns over valuation multiples, earnings disappointment in a few cases and persisting fears of slowdown in the economy. At 10.30 am, the BSE Smallcap index was down 2,126.35 points, or 4.24 per cent, at 47,981.16.
CreditAccess Grameen Ltd (CREDAG) shares plunged 18 per cent, as microfinance institution (MFI) reported its first-ever quarterly losses on account of elevated credit costs. The MFI's asset quality deteriorated for the fifth consecutive quarter, with its guidance getting revised across metrics. The stock fell 17.92 Rs 750.05 apiece.
Alldigi Tech Ltd tanked 12.07 per cent to Rs 850.55. This is even as the company informed stock exchanges about the income tax refund including interest aggregating to Rs 14.35 crore for the financial year. Netweb Technologies India Ltd plunged 11.37 per cent to Rs 1,635. This is even as Arihant Capital Markets believe the Q3 numbers by the company were strong, driven by strong demand in its core segments of AI, HPC, and private cloud solutions.
Solara Active Pharma Sciences Ltd plunged 10 per cent to Rs 558.55.
"Export revenue is expected to grow to 10-11 per cent by FY26 as the company expands in the Middle East, US, and Europe. The company has maintained its long medium-term revenue growth guidance of 30-35 per cent CAGR and is confident of sustaining operating Ebitda margins around 14 per cent," it noted.
Dhani Services Ltd cracked 11.06 per cent to Rs 78.25. Tejas Networks Ltd fell 9.90 per cent to Rs 895.10. Arihant Capital Markets said this company has robust growth opportunity with significant opportunities in BSNL's 5G expansion, BharatNet Phase 3, and international markets, supported by its competitive product architecture and expanded R&D capabilities. Order book refilling and margin improvement are expected in FY26 as major projects convert and international traction grows, it said.
"A notable concern is the disconnect between the benchmarks and the broader market, as selective buying in heavyweight stocks has cushioned the decline, while broader market stocks continue to face sharp corrections, eroding portfolio values. Amid this correction, certain pockets are displaying resilience. Traders are advised to adopt a stock-specific approach and consider hedged positions, given the upcoming events and heightened uncertainty," said Ajit Mishra – SVP, Research, Religare Broking in the weekly note.
Kunal Vora, Head of India Equity Research at BNP Paribas said the appetite for buying expensive emerging market equities should remain low unless there are signs of a strong recovery in growth.
"In the interim, strong domestic inflows continue to support the Indian equity market and we do not see any major risk to this. Overall, we see low likelihood of valuation multiples rerating in 2025 and expect market returns to track or slightly lag earnings growth," he said while suggesting 2025 to be another year of single-digit returns for the markets.
Elara Securities said while it does not rule out near-term volatility, it is not in the camp that believes that the Indian economy is in structural slowdown. It sees the recent slowdown as cyclical and expect a gradual uptick as the year progresses.
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