JP Power, JP Associates, Va Tech Wabag: Why smallcaps shares are shining in bear markets?

BSE SmallCap index has climbed by more than 100 points with an intraday high of 29,659.15 so far in the day. A broad-based buying was recorded in this basket. In a month, this smallcap index has gained by more than 2%.

One of the reasons for sharp buying in small caps can be because investors are booking profits in large-caps and rather preferring smaller size shares to hedge long term gains.

Here are the top five bulls of smallcap basket on Monday:

1. Jaiprakash Power Ventures:

JP Power’s stock traded near its intraday high of ₹8.38 apiece. Overall, the stock gained 11% so far on BSE on Monday.

At around 12.12 pm, JP Power stock traded at ₹8.36 apiece up by 10.73% on BSE. Its market cap is around ₹5,729.49 crore. Year-to-date, the stock has gained by nearly 16% on Dalal Street.

The company’s board of directors is set to meet on Monday to consider the proposal for divestment of Jaypee Nigrie Cement Grinding Unit.

In the quarter that ended September 30, 2022, the company posted a consolidated net profit of ₹75.42 crore compared to a loss of ₹1.42 crore in Q2FY22. While revenue from operations stood at ₹1,385.37 crore — higher than ₹901.91 crore in Q2 of FY22.

Jaypee Group-backed JP Power implements and operates power projects in India. The company currently operates the largest hydroelectric power plant in the private sector in India.

Va Tech Wabag:

Va Tech touched a new 52-week high of ₹374.90 apiece earlier on Monday on BSE. The stock has gained higher by 12% so far in the day.

At present, the stock traded at ₹370 apiece up by ₹35.75 or 10.70%. The company’s market cap is over ₹2,301 crore. Year-to-date, the stock has jumped by at least 18.4% on D-Street.

Investors were upbeat on Va Tech stock after the company announced securing a repeat order from Purolite SRL, Romania (‘Purolite’) worth about ₹260 crore towards upgrading the Industrial Wastewater Treatment Plant (‘WWTP’) in Romania.

As per the regulatory filing, the contract will be an Engineering & Procurement (‘EP’) scope contract which includes design & engineering, equipment supply, installation, commissioning, and start-up of the Purolite Victoria WWTP. The project is scheduled to be executed over a 24-month period.

Va Tech Wabag is a global leader in the water industry backed by rich experience spanning over 98 years. Being a pure-play water technology multinational, WABAG offers a

complete range of technologies and services for Total Water Solutions in both Municipal and Industrial sectors. With over 1,600 water professionals, the company is spread over 25 countries on 4 continents.

3. Gravita India:

Gravita is a leading recycling company having a manufacturing presence around the globe.

On BSE, the stock touched a new 52-week high of ₹469.40 apiece — gaining by at least 12% so far in the day. However, the stock has rallied by nearly 46% year-to-date.

Currently, the stock traded at ₹462.40 apiece up by 10.37% on BSE. Its market cap is around ₹3,192 crore.

Last week, the company’s subsidiary Gravita Togo SAU located in Togo, West Africa started commercial production of Aluminum CastAlloys from a new recycling plant having an annual capacity of around 4,000 MTP A in phase 1. The Company is expecting an additional revenue of approximately ₹60 crore per annum with gross margins of approx 26% from the new capacity, as per the regulatory filing.

4. Jaiprakash Associates:

JP Associates froze at 10% upper circuit on Monday at ₹11.74 apiece on BSE, Also, part of Jaypee Group, JP Associates is in focus as the company’s board also set to meet on Monday to discuss the progress on the various divestment initiatives of the company.

Year-to-date, JP Associates shares grew by a little over 12% on BSE.

In Q2FY23, the company’s consolidated net loss widened to ₹340.05 crore versus ₹310.92 crore in Q2FY22, however, narrowed compared to a loss of ₹381.37 crore in Q1FY23. Revenue from operations stood at ₹1,953.96 crore, however, higher than ₹1,689.60 crore in Q2FY22 and ₹1,839.76 crore in Q1FY23.

Jaiprakash Associates Ltd., the flagship company of the Group, is a leader in the construction of river valley and hydropower projects on a turnkey basis.

5. Nectar Lifesciences:

The stock traded near its intraday high of ₹24.50 a piece. Overall, in the early deals, the stock gained by at least 13.2% on BSE.

Currently, the stock traded at ₹23.65 apiece up by 9.24%. Its market cap is around ₹538.23 crore on BSE. The stock’s monthly upside is around 14.2% on Dalal Street.

Nectar Lifesciences is among the fast-growing pharmaceutical companies. NLL has transformed itself from being a small Domestic API player to one of the most integrated players in the Global Cephalosporins Industry within the Anti Infective Therapeutic segment.

Talking about market performance, Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, this week is crucial for equity markets globally since markets will be keenly waiting for the commentary of the Fed on the 14th and that of ECB and BoE on the 15th. However, the tone for the commentary of the central banks will be set by the US CPI data due on the 13th. If the CPI data confirms a declining trend, the Fed can reaffirm its earlier comment about slowing down rate hikes, which will be interpreted by the market as a departure from the hawkish stance. On the contrary, if the CPI data reflects stubborn inflation, the Fed will have no alternative but to remain hawkish. This will be negative for equity markets.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.