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  • Nov 23, 2022 - 5 Smallcap Stocks That Reported Increasingly Strong Q2 Results

5 Smallcap Stocks That Reported Increasingly Strong Q2 Results

Nov 23, 2022

5 Smallcap Stocks That Reported Increasingly Strong Q2 Results

Small-cap stocks are having a stellar Q2 earnings season, with some early winners reporting double-digit percentage growth across parameters.

With robust growth in earnings, investors are getting their heads around which to make small-cap stocks their next investment.

In today's article, we take a look at five small-cap stocks which have registered strong growth in their September 2022 earnings.

Let's get started...

#1 Best Agrolife

First on the list is Best Agrolife, a pesticides and agrochemicals company.

Formerly known as Sahyog Multibase, the company is a leading agrochemicals manufacturer in India and among the top 15 agrochemicals companies in the country.

It's one of the fastest growing manufacturers of technicals, formulations, intermediates, and public health products.

In the most recent quarter ended September 2022, the company reported a five-fold jump in its net profit at Rs 1.3 billion (bn).

This comes on the back of strong revenues, which more than doubled to Rs 7 bn in the quarter under review on a YoY basis.

The company delivered a strong Q2 as its plants achieved higher capacity utilisation. In the June 2022 quarter too, the company had registered a strong 55% growth in net profit driven by better sales.

Best Agrolife has a 30,000+ metric tonnes per annum (MTPA) manufacturing formulation capacity and a 7,000+ MTPA integrated state-of-the-art technical plant.

Top investing gurus of India have not shied away into backing this company. Ashish Kacholia holds over 1% stake in Best Agrolife.

Strong results among other reasons have taken the company's shares near their yearly high levels.

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To know more, check out the detailed quarterly results of Best Agrolife.

#2 Siyaram Silk

Next on the list is Siyaram Silk Mills, a textile manufacturing company. It's engaged in manufacturing fabrics and readymade garments, especially in the men's wear section.

The company has a diverse fabric range comprising all blends such as polyester viscose, polyester wool, 100% cotton, cotton blends and linen. Main brands in the fabric division are Siyaram's, Mistair, Featherz, Cadini, and J Hampstead.

In the September 2022 quarter, Siyaram Silk delivered a 51% growth in its consolidated net profit on the back of improved operating performance and marketing initiatives.

Net profit came in at Rs 801 million (m) as compared to Rs 529 m reported in the year ago period and Rs 308 m reported in the June 2022 quarter.

Revenues for the quarter under review were higher by 32% on a YoY basis. Its fabric and apparel division delivered strong growth in Q2.

The company's presence across all value chains with manufacturing capacities has enabled it to adopt to market dynamics and manage fixed costs.

The stock performance has remained rangebound so far in 2022 but it did see a spike post announcing quarterly results.

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To know more, check out the detailed quarterly results of Siyaram Silk.

#3 Shriram Pistons

Next on the list is Shriram Pistons & Rings. The company is primarily engaged in the manufacturing of pistons, piston pins, piston rings, and engine valves for various automotive companies in the domestic and export markets.

In the September 2022 quarter, the auto ancillary company delivered a 56% YoY growth in net profit. Net profit came in at Rs 730 m compared to Rs 467 m in the year ago period. Sequentially too, net profit saw a strong growth from Rs 547 m in June 2022.

The growth was due to doubling of other income and revenues growing 22% YoY.

The company has shown consistent growth in revenue and profit for the past four quarters. This comes on the back of a pick-up in demand for domestic commercial vehicles (CVs) and healthy exports.

As it has an established market position, the company is set for growth trajectory at least for the near term as it's already seeing growth in production volumes.

The shift to electric vehicles (EVs) is a threat which still remains for Shriram Pistons. To counter this, the company has been focusing on increasing its share of revenue from CVs and off-the-road segments.

In 2022 so far, shares of the company have delivered a decent performance. They trade near 52-week high levels.

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To know more, check out the detailed quarterly results of Shriram Pistons.

#4 Alicon Castalloy

Fourth on the list is Alicon Castalloy, an auto-ancillary company from the smallcap space. It has a presence in 18 countries and is a part of Alicon Group.

The company manufactures aluminium castings including cylinder heads, support brackets, intake manifolds, crankshafts, and engine brackets for the auto industry.

For the September 2022 quarter, the company reported an over five-fold jump in its net profit to Rs 153.4 m. This compared with Rs 30 m in the year ago period and Rs 108 m in the June 2022 quarter.

Revenues rose 41% YoY while margins also beat street estimates.

As EV sales pick up, the company will continue to do well as it has a diversified revenue stream and strong order in its kitty. In the year gone by, orders from Dena Corporation and Aether Energy were the primary reason behind Alicon's growth.

Recently, the company won a multi-million dollar order spanning five years from Jaguar Land Rover (JLR) in the United Kingdom to supply a critical product for their eMobility platform called eAxle housing.

This is its biggest order from a single customer for a single product.

In 2022 so far, shares of the company have gained 28%.

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To know more, check out the detailed quarterly results of Alicon Castalloy.

#5 International Conveyors

Last on the list in International Conveyors.

The company is engaged in the manufacturing and marketing of solid woven polyvinyl chloride (PVC) covered conveyor belts. These belts are fire retardant, antistatic, and are mainly used in underground mines for transportation of minerals.

The company operates in a niche segment and its growth is linked to the growth of underground mining operations. Coal India is its major client.

For the September 2022 quarter, the company reported over ten-fold jump in its net profit to Rs 72.2 m. This compared with a net profit of Rs 7.2 m in the year ago period.

Revenues grew 28% to Rs 660 m compared with Rs 515 m reported in September 2021.

The company announced a buyback in September this year which opened on 3 November 2022 and will conclude on 3 May 2023. The buyback size amounts to Rs 297 m and the price band is fixed at Rs 75.

In 2022 so far, shares of International Conveyors have lost 17%.

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To know more, check out the detailed quarterly results of International Conveyors.

Other smallcap stocks which delivered strong Q2

Apart from the above, here are other smallcap stocks which delivered strong Q2 results.

  Net Sales Net Profit
Rs million Sep-22 Sep-21 Jun-22 Sep-22 Sep-21 Jun-22
Triveni Engineering 14,714.0 11,522.9 13,604.3 15,286.8 669.2 595.7
Taj GVK Hotels 890.5 559.5 855.0 320.9 37.0 159.7
Astra Microwave 1,709.0 1,768.3 1,611.6 225.9 29.3 114.3
Tasty Bite 1,416.2 854.9 1,182.0 95.1 13.2 78.0
KDDL 749.0 529.7 690.4 264.4 39.6 185.2
Sanghvi Movers 1,092.4 705.4 972.4 289.0 45.3 144.9
Vascon Engineers 1,799.9 1,178.2 1,414.3 217.3 34.2 101.1
Data Source: Ace Equity

Since smallcap stocks interest you, check out Equitymaster's Indian stock screener which has a separate section on smallcaps.

Here are some of the popular screens:

Also check out the below video where lead smallcap analyst at Equitymaster Richa Agarwal talks about 3 smallcap companies that are expected to grow at 15% or more in their niches.

Happy Investing!

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Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

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