The other stocks that hogged the limelight with returns between 176% and 102% include NACL Industries, SML Mahindra, Force Motors, Lumax Auto Technologies, Lumax Industries, ASM Technologies GRM Overseas, AB Infrabuild, Axiscades Technologies, Apollo Micro Systems, Gabriel India and Tourism Finance Corporation Of India (TFCI).
The strong show by these stocks assumes importance given that the year saw risk-off sentiments dominating the street. BSE Smallcap index is down over 7% this year and has trailed the BSE Midcap Index (-1%) and the BSE Sensex (8%). The year also marked a second instance over the last five years when smallcap segment trailed midcap and the largecap.The last time the BSE Smallcap index lost the race was in 2022, a year marked by global rate hikes and heightened uncertainty. This index slipped into negative territory, declining 1.8%, highlighting its vulnerability during risk-off phases.
It was the year when the US Federal Reserve kicked off its rate-hike cycle in March. The Reserve Bank of India (RBI) followed in May with a surprise 40-basis-point increase as inflation pressures intensified. The Russia–Ukraine war also broke out during the year, fuelling global inflation, particularly across developed economies.
Largecaps proved relatively resilient, rising 4.73%, while midcaps managed a modest 1.37% gain.
Also Read: Risk-off 2025 brings largecaps back on top after two-year hiatus; what does 2026 hold?
The post-pandemic liquidity boom of 2021 belonged decisively to the broader market, and smallcaps benefited immensely. The BSE Smallcap topped the charts with 63% returns. The risk appetite returned strongly in 2023 and stayed for a better part of 2024, putting this index in the pole position in both years.
BSE Smallcap performance snapshot
According to an Ace Equity data analysed by ETMarkets, nearly 25% or 303 stocks were in a positive territory as of December 15, 2025. Of these, 197 stocks witnessed double-digit returns while 77 have managed single-digit returns. Meanwhile, over a dozen stocks managed to remain afloat in the green. A few bad sessions could push them into the red.
A lion’s share, i.e. 894 or 75% of the stocks in this index have slipped as low a 90% in 2025, underscoring their lacklustre performance.
Outlook in 2026
Kranthi Bathini, Director–Equity Strategy at WealthMills Securities, sees any broad-based recovery in smallcap stocks to be based on how the largecaps perform in 2026.
He said that broader market stocks typically follow the lead of largecaps, outperforming them during bull phases, but lagging in periods of market weakness.
In his view, a US-India trade deal and earnings will likely decide how overall markets perform next year, and he remains bullish on the outperformance of largecaps.
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Nitin Bhasin, Head of Institutional Equities at Ambit does not currently see a very attractive valuation point for broader market stocks, though he clarifies that this doesn’t mean that every smallcap or midcap stock won’t perform. “I would maintain, hence, as you rightly said, bottom-up stock picking ideas will remain the job for portfolio managers and not only that, I think for them it is also the sizing of the bets,” he told ET Now. It will be a stock-picker’s market for the next 9-10 months, he opined.
(Data inputs by Ritesh Presswala)
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)