Best small cap stocks you can consider investing in 2023-24

How do small cap stocks work?

Small-cap stocks represent an exciting investment opportunity for investors willing to take more risk for greater rewards. Small-cap stocks are shares of firms whose market cap is less than ₹500 crores. Although investors frequently pay more attention to larger companies, some of the top small cap stocks offered by some of the best small cap mutual funds India can offer higher returns due to their greater growth potential.

Small-cap companies typically have innovative products or services that are still being fully recognized by the market and are in the early stages of growth and expansion. It’s crucial to remember that small-cap stocks can be riskier and more volatile than those of bigger, more established companies. They are more vulnerable to changes in the economy and the state of the market. However, investing in the best-performing small-cap mutual fund can present an exciting opportunity to potentially achieve significant long-term growth and profitability for those willing to take on some risk. Here are a few small-cap stocks you can consider for investments.

Ujjivan Financial Services

Ujjivan Financial Services is a well-known financial company that offers a number of financial services to its clients. With an emphasis on financial inclusion and empowerment, Ujjivan Financial Services has established itself as a reliable business partner for many people and organizations in India. The bank’s dedication to ensuring that everyone has access to financial services, especially in underserved and unbanked areas, has helped many individuals and communities.

The business has a history of providing high-quality financial services, including savings accounts, loans, insurance, and wealth management, all of which are tailored to meet the various needs of their clients. The share price of the company was ₹267 as of January 16, 2023. Ujjivan is one of the top small-cap stocks to buy in India. Its share price has increased by almost 70% over the past six months.

Gokaldas Exports

Based in Bangalore, India, Gokaldas Exports is a well-known fashion apparel manufacturer and exporter. The business is dedicated to providing its clients, including some of the most well-known fashion brands in the world, with high-quality products. Gokaldas Exports has established various standards to lessen its environmental impact with a focus on sustainability, the use of renewable energy, waste reduction, and ethical labor practices. They are among the biggest employers, employing over 40,000 people across their manufacturing facilities.

With a variety of products to suit various markets and tastes, Gokaldas Exports has a demonstrated history of innovation, design, and customer service. Gokaldas Exports, a trusted partner for many top fashion brands and retailers with a dedication to excellence and a strong global presence, is an industry leader in the Indian textile and apparel sector. Gokaldas shares were trading at ₹377 as of January 2023.

Bajaj Consumer Care

Bajaj Consumer Care, a well-known manufacturer of hair care products in India, offers a variety of high-quality, reasonably priced options for various hair types. The company has maintained its market dominance in the hair oil sector thanks to well-known brands like Bajaj Almond Drops Hair Oil, Bajaj Kailash Parbat Hair Oil, and Bajaj Brahmi Amla Hair Oil. With a strong market presence and distribution network throughout India, Bajaj Consumer Care ensures that customers can easily access their products. With an emphasis on sustainability and social responsibility, they also provide personal care and home care products. Bajaj Consumer Care is a trusted and respected brand in the Indian FMCG sector with a focus on the customer and a dedication to excellence, counting among the top small cap stocks in India.

Delta Corp

Delta Corp works in area of gaming and hospitality. The company’s main business activities include running casinos and other gaming establishments and providing its clients with hospitality and entertainment services.

Gaming, hospitality, and real estate make up the three main operating segments of Delta Corp. The company’s casinos and other gaming establishments, which are spread across several Indian states, including Goa, Sikkim, and Daman, are included in the gaming segment. The company runs hotels and resorts in these areas as well as in other regions of India, which are included in the hospitality segment. Real estate development and sales include both residential and commercial properties.

Thyrocare Technologies Ltd.

Thyrocare Technologies Ltd., a publicly traded firm, works in the healthcare sector. The company’s main business offers diagnostic and preventive healthcare services, such as health screenings, clinical laboratory testing, and wellness services.

Thyrocare has affordable, cutting-edge diagnostic testing solutions. The business operates a fully automated diagnostic laboratory that uses cutting-edge tools and procedures to deliver precise and trustworthy test results. The company’s labs have advanced machinery and can process numerous samples effectively.

Advantages of investing in the best small-cap shares

High growth potential: Because they are still in the early stages of their growth trajectory, small-cap companies have a higher growth potential than large-cap companies. Their share price may significantly rise as they continue to expand and grow, giving investors greater returns.

Investment in top small-cap stocks can help diversify a portfolio because, in contrast to large-cap stocks, they frequently operate in different sectors or industries. Through diversification, you can reduce a portfolio’s risk and volatility.

You can buy top small-cap stocks in India at a discount rate due to their potential undervaluation, and investors tend to overlook them. However, the share price may rise as the business develops and attracts more attention, increasing returns.

Lower pricing and diversification: Small-cap stocks are priced lower, making them affordable to many investors. They also offer an excellent opportunity for portfolio diversification.

Flexibility: Small-cap businesses can grow more quickly and perform better financially because they are frequently more flexible and able to adapt quickly to changes in the market or industry.

Higher return potential: Compared to large-cap stocks, small-cap stocks have a higher return potential for investors because of their high growth potential and underappreciation. Investors should carefully research and consider their options because small-cap stocks can also be more volatile and involve higher risks.

Conclusion

Buying top small-cap stocks may be a wise choice for investors who wish to broaden their holdings and generate higher returns. In fact, some of the best small-cap mutual funds can offer significant growth potential and undervalued opportunities, despite being more risky and volatile. Based on their financial performance, growth potential, and market outlook, investors can consider a number of promising small-cap stocks as 2023 gets under way. Before purchasing any stock, investors should conduct careful due diligence and evaluation. They should also incorporate small-cap stocks’ potential risks and rewards into their overall investment strategy. With the right strategy and analysis, top small-cap stocks can present exciting opportunities for investors.

FAQs