By Hassan
Malik
Rapid changes
in the stock market leave investors everywhere puzzled. They are constantly
rotating what they want to invest in as well as where they want to invest. As
of late, small is the new big and India has become a destination to invest in.
According to The Business Insider, over
the past two years small-cap stocks have rallied comparatively more than
large-caps. The CNX Smallcap index has returned 75% during the period compared
with the 46% return of the benchmark CNX Nifty. Foreign institutional investors
(FIIs), who are known to usually show interest exclusively in larger companies,
are beginning to take note. Here are 3 India-based small cap stocks in which
the FIIs have increased its holdings in over the past two years:
Inox Leisure: Imagine knowing about
IMAX before it became the most widely used system for multiplex space films.
Well now, investors don’t have to. Inox Leisure is the second-biggest player in
the multiplex space with 365 screens. The Mumbai, India based company plans to
add 50-60 screens every year to take its screen count to 546 (just mere
hundreds behind IMAX’s 837). It predicts to accomplish this in about four
years. With an average ticket price of Rs 175 (US$2.82) and footfalls of 11.6
million, this would enhance Inox’s revenue.
Gulf Oil Lubricants India: Falling
oil prices don’t necessarily have to be a bad thing for companies and investors.
Mumbai-based Gulf Oil Lubricants India is benefiting from lower prices as crude
oil accounts for 65-75% of its raw material cost. However, traditionally, companies
don’t pass on the benefit of lower input costs to consumers to ensure margin
expansion. Investors need not worry. In the coming months, a sharp spike in the
sales of commercial vehicles is expected to increase lubricant’s volume. Due to
its focus on volume growth, the company’s market share has increased to 6.9% in
2014 from 4.4% in 2007.
Specialty Restaurants: This is
the only listed company in the fine-dining segment. And for two good reasons: differentiation
and expansion. Specialty Restaurants focuses on non-Indian cuisines, which
gives it a niche in the market and differentiates it from its competitors.
Though the restaurant is mainly known for its flagship Chinese food brand Mainland
China, it has expanded its food offerings to Asian, Thai, Burmese and all-day
dining under brands such Sigree Global Grill and Hoppipola.
Disclaimer: This article was posted with
the permission of a third-party contributor and the opinions contained
therein do not necessarily reflect those of SmallCapPower. SmallCapPower
does not endorse any investment advice provided by these third-party
contributors.
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