Five solid small caps at 52-week lows. Time to take a close look?
Small-cap stocks are making headlines again, but not for the reasons they were in March. Back then, comments from markets regulator, the Securities and Exchange Board of India (Sebi), had triggered a sell-off. Now, the narrative has flipped.
Small-cap indices are on a tear, hitting record highs seemingly every other day. This comes after two months of underperformance compared to the broader market. In April, the small-cap index surged a staggering 11.4%, leaving the benchmark Nifty in the dust, which rose only 1.2%.
Even though the Nifty itself is at record highs, the small-cap rally is a different beast altogether. All three indices hit new peaks on 30 April 2024. However, there's a twist.
While the overall segment is booming, some individual small-cap stocks are hitting 52-week lows. So why are these five small-caps bucking the trend? First on the list is TCI Express. The company offers distribution services through various modes of transport.
TCI Express caters to a diversified customer base, including automotive, pharmaceutical, textiles, engineering, and telecom industries. With a hub-and-spoke infrastructure of 900-plus owned centres across India, covering over 95% of the pin codes, the company offers surface, domestic and international air, and e-commerce express services. Shares of TCI Express hit their 52-week low of ₹997 on 14 March 2024 and are currently trading just 8% above their all-time lows.
This decline is attributed to subdued financial results. In the March 2024 quarter, TCI Express reported a 2.9% year-on-year (YoY) decline in total income to ₹3.2 billion, while profits fell 17.8% to ₹315.9 million due to a 7% increase in selling, general, and administrative expenses. Additionally, foreign
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