Stock markets are primarily driven by institutional money. They invest huge amounts and dictate share price movements to a great extent. A strong analytical team backs Foreign Institutional Investors (FIIs) and they invest in the stocks of other countries after thorough research. Past data reveals that whenever FIIs invest in particular stocks, their share price starts to increase. Here are three small-cap stocks in which FIIs recently increased their stake:
Kirloskar Oil Engines
The company manufactures engines and generates sets, pump sets and power tillers. FIIs increased their stake in it from 3.60% in the December quarter of 2022 (Q3FY23) to 6.04% as of the March quarter (Q4FY23), indicating an increase of 2.44%.
In the past year, the company’s share price rose from ₹ 142.30 apiece to ₹ 437.00, giving multibagger returns of 207.10 per cent. Thus, if an investor would have invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 3.07 lakhs today!
With a market capitalization of ₹ 6,166 crores, Kirloskar Oil Engines is a small-cap company. It has a return on equity of 8.72 per cent and a debt-to-equity ratio of 1.16. Its shares were trading at a price-to-earnings (P/E) ratio of 19.16 which is lower than the industry P/E of 26.27 indicating that the stock might be undervalued as compared to its peers.
Mrs. Bectors Food Specialities
The company manufactures and distributes food products such as biscuits, pizza bases, breads and cakes. FIIs increased their stake in it from 1.43% in the December quarter of 2022 (Q3FY23) to 5.13% as of the March quarter (Q4FY23), which is an increase of 3.7%.
In the past year, the company’s share price rose from ₹ 290.00 apiece to ₹ 643.80, giving multibagger returns of 122.00 per cent. Thus, if an investor would have invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 2.22 lakhs today!
With a market capitalization of ₹ 3,743 crores, Mrs Bectors Food Specialities is a small-cap company. It has a return on equity of 12.70 per cent and an ideal debt-to-equity ratio of 0.25. Its shares were trading at a price-to-earnings (P/E) ratio of 51.55 which is higher than the industry P/E of 22.13 indicating that the stock might be overvalued as compared to its peers.
Cigniti Technologies
The engineering company provides software testing services across the world. FIIs increased their stake in it from 2.87% in the December quarter of 2022 (Q3FY23) to 5.64% as of the March quarter (Q4FY23), translating to an increase of 2.77%.
In the past year, the company’s share price rose from ₹ 418.30 apiece to ₹ 863.95, giving multibagger returns of 106.54 per cent. Thus, if an investor would have invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 2.06 lakhs today!
With a market capitalization of ₹ 2,366 crores, Cigniti Technologies is a small-cap company. It has an excellent return on equity of 32.09 per cent and an ideal debt-to-equity ratio of 0.10. Its shares were trading at a price-to-earnings (P/E) ratio of 14.14 which is lower than the industry P/E of 29.53 indicating that the stock might be undervalued as compared to its peers.
Written by Simran Bafna
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