Small-cap stocks: Laurus Labs, Swan Energy, Godfrey Phillips, Natco Pharma, Delhivery, and Himadri Speciality Chemicals are among more than a dozen small-cap stocks that delivered double-digit returns in the last month, driven largely by renewed investor interest following their June quarter results and positive brokerage upgrades.
Despite the broader Indian stock market lacking clear direction in recent weeks amid investor wait-and-watch mode over a potential mini trade deal with the US, continued overseas investor caution, and earnings disappointments in select heavyweights, the rally in small-cap stocks has helped offset broader market weakness in retail portfolios.
Among the top performers in the Nifty Smallcap 100 index, Laurus Labs led the gains with a rise of over 23% in a month and a 45.3% surge from its April lows. The rally was driven by expectations of another strong performance in the June quarter, following an impressive FY25 performance, where profits more than doubled after three years of lackluster earnings.
Swan Energy was another notable gainer, rising 20%, followed by CreditAccess Grameen, which jumped 19%. The NBFC showed signs of recovery in the June quarter and received rating upgrades post-results, further boosting sentiment.
Meanwhile, Delhivery, which has been regaining strength in recent months after a prolonged period of underperformance, gained another 17% in the past month. Investor sentiment improved further after Motilal Oswal initiated coverage on the stock with a ‘Buy’ rating and set a target price of ₹480 per share, citing its strategic focus on acquisitions and integrated logistics solutions as key drivers of long-term growth.
Likewise, Aadhar Housing Finance also saw a strong spike after Bernstein initiated coverage with an ‘Outperform’ rating and set a price target of ₹550, expecting the company to maintain a steady growth trajectory of around 20% AUM CAGR. The stock has delivered a 16.3% return over the past month.
Should investors add more small-cap stocks to their portfolio alongside large caps?
According to Mansi Patel, Head – Investment Counsellor Institution, large-cap stocks are currently emerging as the preferred choice for investors, driven by heightened volatility, global macroeconomic uncertainties, and their relatively stable earnings outlook. She notes that blue-chip companies with strong balance sheets and consistent cash flows, such as HDFC Bank, Bajaj Finance, Infosys, and Larsen & Toubro, continue to offer defensive comfort and remain widely favored by institutional investors, particularly during periods of FII outflows and rate unpredictability.
At the same time, Patel points out that mid- and small-cap stocks are gaining renewed investor interest following meaningful corrections that have brought valuations to more attractive levels. Supported by a stronger-than-expected earnings season, the risk-reward profile for quality names in this segment has improved considerably.
In her view, this emerging momentum could mark the beginning of a more sustained phase of outperformance. Against this backdrop, she advocates for a balanced investment strategy, anchoring portfolios with large-cap stability while selectively adding high-conviction mid- and small-cap opportunities, especially in sectors like banking and infrastructure where fundamentals continue to strengthen.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
