BSE Smallcap Stocks include companies in their growth stage, making them great avenues for investment. They also include companies with a low market capitalisation, probably less than ₹5000 crores. The BSE Smallcap index includes stocks of companies still in their early stages of development and possess limited market capitalisation compared to mid- and large-cap companies.
However, due to their limited market capitalisation and low stock price, these stocks have a high potential for exponential growth. Investments in small-cap companies are defined by high return and high-risk profiles.
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Performance of BSE smallcap stocks
Investors have earned manifold returns from investment in BSE smallcap stocks. With a more than 29% return in one year, the smallcap index has beat the NIFTY 50 returns. With room for more and better returns, the small-cap stocks and the overall index will continue to grow if the trend continues.
With favourable market trends, investor outlook, and underlying company performance, the small-cap index can reach its all-time high shortly.
Suzlon stock performance
Suzlon is a player in the renewable energy sector that offers wind energy solutions and manufactures wind turbines. With favourable government policies and a positive business outlook, Suzlon aims to improve its renewable energy solutions offerings for better revenue and growth. Sales have increased by 45% in 3 years, with a 30% profit growth.
Moreover, the company is trying to reduce its debt, which is a positive sign for investors and promoters.
Suzlon stock has performed remarkably well compared to its counterparts. The stock has reached new heights with 100% returns in 6 months. Rising from a 52-week low of ₹21.71, Suzlon stock has reached the price of 84.4, delivering 204% returns in 1 year.
Despite all the positives, the company has generated negative cash flow with an ROE of 1.25%.
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Risks associated with investment in Suzlon stock
With a buoyant market trend for renewable energy stocks and the overall sector, Suzlon aims to capitalise on the demand and make necessary changes to improve its financial performance.
With new orders from NTPC and business restructuring efforts, the company strives for growth and delivers returns to its investors. However, stock investment may prove risky in the present scenario. Investors, therefore, need to make informed decisions before investing in Suzlon Energy stock.
Conclusion
Suzlon Energy, a small-cap stock, has delivered excellent returns and, with an optimistic investor and business outlook, aims to provide the same. With an increase in Market capital, the company has reached the level of ₹ 1 lakh crore in total capital investment.
Major stock brokerage and stock rating companies are positive on the Suzlon share price and its future performance. With an aim of almost 22% returns from the current levels, Suzlon Energy stock can offer good returns to investors. Complete research and analysis of the Suzlon Energy stock price can help investors make the right decision. Small-cap stocks like Suzlon can deliver better returns than mid- and large-cap stocks, but investors must factor in market volatility before investing.
