Broader markets soar in FY21, outperform benchmarks; most stocks give multibagger returns

The Nifty Midcap and the Nifty Smallcap surged by 106 percent and 131 percent, respectively during the course of the financial year, while the NSE500 jumped 83 percent. In comparison, the Nifty has gained 71 percent in FY21.

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Midcap and smallcap stocks were the stars of the rally, some jumping up to 1,000 percent during the year. Most of the stocks that have multi-bagger returns are part of small and midcap indices.

Small and midcaps outperformed as most of the stocks in the broader market space were trading at attractive valuations after two years of underperformance, analysts said.

Midcap and smallcap stocks are gaining traction largely due to earning recovery, improvement in corporate governance and debt reduction, they added.

On the NSE500 index, over 200 stocks rallied over 100 percent in FY21 while 11 were in the red. Among these, Adani Total Gas jumped over 1,000 percent while Adani Green and Adani Enterprises rose over 650 percent each. Other stocks like Affle India, Hind Copper, Laurus Labs, Aarti Drugs, APL Apollo Tubes, JSPL, Alok Industries, Alkyl Amines, Dixon Tech, and Adani Transmission added over 400 percent each.

The Nifty50 midcap index also saw just 1 stock (Rajesh Exports) ending lower for the year while 16 stocks more than doubled investor wealth. Dalmia Bharat rose the most, up 240 percent while Emami, Apollo Hospitals, Mphasis, AU Small Finance Bank, and Coforge rallied over 150 percent each.

Meanwhile, in the smallcap space, 95 of the 100 stocks in the Nifty Smallcap 100 index were positive for the year. Of these, around 30 stocks surged more than 100 percent for the year. Jet Airways lad the pack, rising 600 percent followed by Indo Count Industries, Inox Wind, Bajaj Electricals, Persistent Systems, HDIL, Sterlite Tech, Repco Home Finance and Sobha Developers jumping between 200 percent and 460 percent each.

Going ahead, experts say mid and small-size firms that are sectoral leaders will continue to do well and that investors should look at good companies that are available at attractive valuations.