Best Small Cap Stocks Under Rs 500 – Key Metrics & Complete List

Best Small Cap Stocks Under Rs 500 - Cover Image

Best Small Cap Stocks Under Rs 500: Hello, dear reader. Scrounging through your wallet, ask yourself – What can ₹500 get you today? One month subscription to a streaming service, maybe some groceries, or an opportunity to grow rich? When the average investor decides to enter the market, it is unlikely they will start with […]

The post Best Small Cap Stocks Under Rs 500 – Key Metrics & Complete List appeared first on Trade Brains.

Best Small Cap Stocks Under Rs 500: Hello, dear reader. Scrounging through your wallet, ask yourself – What can ₹500 get you today? One month subscription to a streaming service, maybe some groceries, or an opportunity to grow rich? When the average investor decides to enter the market, it is unlikely they will start with huge sums of money.

it could be due to skepticism, a little caution, and the fact that their knowledge of the markets isn’t advanced yet. Whatever may be the case, starting small is always the smart strategy. Here is a list of the best small cap stocks under Rs 500.

Best Small Cap Stocks Under Rs 500

Best Small Cap Stocks Under Rs 500 #1 – Kirloskar Ferrous Industries

Kirloskar Ferrous Logo
CMP ₹ 430 Market Cap (Cr.) ₹ 5,980
EPS ₹ 24.1 Stock P/E 17.8
ROCE 30.1 % ROE 34.4 %
Face Value ₹ 5.00 Book Value ₹ 106
Promoter Holding 56.7 % Price to Book Value 4.09
Debt to Equity 0.7 Dividend Yield 1.24 %
Net Profit Margin 11.1 % Operating Profit Margin 14.1 %

Founded in 1991, KFIL is an engineering company, involved in the manufacturing of Pig Iron and Grey Iron casts. The metal products produced by the company are used in various industries, such as farm equipment, engines, and construction machines. The company states that its products are used by some of the biggest automobile companies.

KFIL is a small-cap engineering company, having a market cap of ₹5,980 crores. The company’s had some impressive sales in recent years, clocking in ₹3,158 crores in 9M FY 23, and net profits of ₹269 crores. The company had its most profitable year in FY 22, netting ₹406 crores from ₹3,615 crores in revenue.

Further, it has an extraordinary ROE and ROCE of 34.4 percent and 30.1 percent respectively. Speaking about the company’s debt situation, it has a low D/E ratio of 0.7. The company’s stock P/E of 17.8 is below its industry P/E of 20.9, indicating a slight underpricing of the stock.

The promoters of Kirloskar Ferrous, the Kirloskar family, own a 56.6 percent stake in the company. They have consistently been trimming their stake, from 59.3 percent in June 2020 to 56.6 percent in December 2022. KFIL is one the best performing small cap stocks under ₹500, giving a staggering 607.14 percent return in 5 years.

Best Small Cap Stocks Under Rs 500 #2 – Balrampur Chini Mills

Best Small cap Stocks under Rs 500 - Balrampur Chini Mills
CMP ₹ 412 Market Cap (Cr.) ₹ 8,313 Cr.
EPS ₹ 13.2 Stock P/E 30.7
ROCE 16.1 % ROE 17.3 %
Face Value ₹ 1.00 Book Value ₹ 135
Promoter Holding 42.4 % Price to Book Value 3.05
Debt to Equity 0.18 Dividend Yield 0.60 %
Net Profit Margin 9.60 % Operating Profit Margin 9.84 %

At #2 on our list of best small-cap stocks under ₹500, we have sugar maker Balrampur Chini Mills. The company is one of the leading sugar and ethanol producers in the country. Besides that, they are also involved in the power and agri-inputs sectors.

Balrampur is a small-cap leading sugar stock. The company’s size is approx ₹8,313 crores in market cap. They have had record sales in the past three years, making ₹4,741 crores in FY 20, ₹4,812 crores in FY 21, and ₹4,846 crores in FY 22. While sales have been consistent, they haven’t been growing at a fast pace.

The operating profit margin of the company has also dipped, lowering net profits despite higher revenues than in previous years. FY 22’s net profits were ₹465 crores, FY 21’s profits were ₹480 crores and FY 20’s profits were ₹519 crores. This clearly shows a downward pattern in net profits.

The stock P/E is a sky-high 30.7, versus its industry P/E of 13.9. This could either translate to an overvaluation in the market or a higher demand for the stock by investors. The company is mostly debt free, having a low and optimistic D/E ratio of 0.18. It has a very good ROE (17.3%) and ROCE (16.1%), indicating proper utilization of funds at hand.

The promoters of Balrampur, the Saraogi family, own 42.4 percent of the company, a one percent increase from September 2021. Balrampur Chini Mills is a 4X-bagger, giving a return of over 464.9 percent in a period of 5 years.

Also Read – Best Small Cap Stocks Under Rs 100 – High Risk, High Reward?

Best Small Cap Stocks Under Rs 500 #3 – Garden Reach Shipbuilders & Engineers

GRSE logo
CMP ₹ 466 Market Cap (Cr.) ₹ 5,335 Cr.
EPS ₹ 19.2 Stock P/E 24.3
ROCE 20.5 % ROE 15.1 %
Face Value ₹ 10.0 Book Value ₹ 119
Promoter Holding 74.5 % Price to Book Value 3.92
Debt to Equity 0.01 Dividend Yield 1.26 %
Net Profit Margin 10.3 % Operating Profit Margin 6.43 %

Out of all the stocks mentioned here, Garden Reach Shipbuilders is the oldest small-cap stock. The company’s origins date back to 1884, in the business of shipbuilding and repairs. The company was officially incorporated in the year 1934, well before India’s Independence. It is now a listed Government Of India Company, under the Ministry of Defence.2

Garden Reach is one of the smaller defense stocks listed in the Indian markets, sized at ₹5,335 crores. The company has logged its highest-ever revenues in 9M FY 23, at ₹1,961 crores. They have outperformed their FY 22 revenue figures while having one quarter to spare. FY 22 revenues were ₹1,758 crores and net profits were ₹190 crores.

Profits of 9M FY 23 were ₹173 crores. The company has interestingly reported significant figures under “Other Income” in the past 5 years, sometimes making up for almost two-thirds of its overall profit.

It has a comforting and elevated ROE of 15.1 percent and 20.5 percent respectively. The company is debt-free and has a D/E ratio of almost zero. Its stock P/E of 24.3 is below that of its industry P/E of 34.5. The promoters of Garden Reach – The Government Of India, are the majority holders, owning a 74.5 percent stake, with no recent stake sale or reduction. In a time frame of 5 years, Garden Reach Shipbuilders has given a return of 358.9 percent, well over tripling investors’ wealth.

Best Small Cap Stocks Under Rs 500 #4 – ELGI Equipments

Best Small cap Stocks under Rs 500 - ELGI Logo
CMP ₹ 473 Market Cap (Cr.) ₹ 14,976 Cr.
EPS ₹ 8.64 Stock P/E 54.7
ROCE 18.7 % ROE 17.8 %
Face Value ₹ 1.00 Book Value ₹ 35.5
Promoter Holding 31.2 % Price to Book Value 13.2
Debt to Equity 0.6 Dividend Yield 0.25 %
Net Profit Margin 6.70 % Operating Profit Margin 14.0 %

ELGI is one of the larger small-cap stocks on our list, sized at ₹14,976 crores. The company has earned revenues of ₹2,205 crores in 9M FY 23, with net profits for three quarters adding up to ₹201 crores. They have improved OPMs, having outdone FY 22’s profits of ₹178 crores last year, despite higher sales (₹2,525 crores). The company’s ROE and ROCE are higher, at 17.8 percent and 18.7 percent respectively.

The P/E of Elgi Equipments (54.7) is moderately higher than its industry P/E of 39.7. The D/E ratio of 0.6 is on the safer and lower end, indicating lower debt of the company. Shareholding of the company revealed a lot of interesting highlights, such as the growing interest by FIIs in the company, and the fact that the stock is also owned by ace investor Nemish S Shah.

The promoters hold a 31.9 percent stake in the company and haven’t added or reduced their stake significantly. ELGI Equipments has given a return of 234.1 percent in 5 years, well over doubling investors’ wealth, making it a small-cap multi-bagger stock.

Best Small Cap Stocks Under Rs 500 #5 – Brigade Enterprises

Brigade Group Logo
CMP ₹ 482 Market Cap (Cr.) ₹ 11,129 Cr.
EPS ₹ 11.0 Stock P/E 184
ROCE 6.44 % ROE -3.50 %
Face Value ₹ 10.0 Book Value ₹ 133
Promoter Holding 43.8 % Price to Book Value 3.62
Debt to Equity 1.56 Dividend Yield 0.32 %
Net Profit Margin -3.06 % Operating Profit Margin 24.3 %

Brigade Enterprises is a small-cap real estate developer, having a market capitalization of ₹11,129 crores. For three-quarters of FY 23, the company reported a combined revenue of ₹2,601 crores and a combined net profit of ₹160 crores. This is the highest reported net profit of the company in four years (Since 2020). The real estate market took severe damage during the pandemic years and is headed for a recovery in the years to come.

For reference, FY 22 sales were ₹2,999 crores, the highest figures from the company so far. The company’s P/E of 184, is extremely high, compared to its industry P/E of 28.8. The company’s ROE (-3.5%) and ROCE (6.44%) are very low, indicating that the company’s use of capital is inefficient at the time being.

It also has a high D/E ratio of 1.5, implying that the debt has increased drastically over the years. Promoter holding of the company has reduced by almost 3 percent in the past three years. In 5 years, the company has given a return of 188 percent, almost giving a 2X return on investment.

Complete List of Small cap Stocks under Rs 500

Company Industry MCap(Cr) Current Price (Rs) PE Ratio TTM
Elgi Equipments Ltd. Compressors, Pumps ₹14,908.98 ₹473.00 54.75
Suven Pharmaceuticals Ltd. Pharmaceuticals & Drugs ₹12,040.92 ₹472.75 31.75
KEC International Ltd. Engineering – Construction ₹11,661.53 ₹453.60 54.01
Asahi India Glass Ltd. Glass ₹11,606.33 ₹480.40 27.54
Brigade Enterprises Ltd. Construction – Real Estate ₹11,485.82 ₹497.10 45.04
BSE Ltd. Finance – Others ₹6,753.25 ₹499.25 33.11
Cochin Shipyard Ltd. Ship Building ₹6,569.13 ₹499.40 12.17
Glenmark Life Sciences Ltd. Pharmaceuticals & Drugs ₹5,683.42 ₹463.85 13.55
Garden Reach Shipbuilders & Engineers Ltd. Ship Building ₹5,224.14 ₹456.05 23.74
GHCL Ltd. Chemicals ₹4,666.98 ₹488.25 3.99
Sobha Ltd. Construction – Real Estate ₹4,363.86 ₹460.45 48.69
ISGEC Heavy Engineering Ltd. Engineering – Construction ₹3,642.28 ₹495.35 24.61
Newgen Software Technologies Ltd. IT – Software ₹3,470.15 ₹499.00 22.51
Gravita India Ltd. Metal – Non Ferrous ₹3,447.06 ₹499.20 19.29
TCNS Clothing Co. Ltd. Textile ₹2,868.30 ₹464.70 601.32
Dodla Dairy Ltd Consumer Food ₹2,845.54 ₹478.00 20.28
Shivalik Bimetal Controls Ltd. Metal – Non Ferrous ₹2,812.81 ₹488.30 39.03
Kewal Kiran Clothing Ltd. Textile ₹2,784.84 ₹451.90 24.8
Wonderla Holidays Ltd. Amusement Parks, Recreation, Club ₹2,558.17 ₹452.30 20.91
Siyaram Silk Mills Ltd. Textile – Weaving ₹2,260.78 ₹482.00 9.22
Andhra Paper Ltd. Paper & Paper Products ₹1,792.63 ₹450.75 4.21
KPI Green Energy Ltd. Engineering – Industrial Equipments ₹1,770.20 ₹488.00 20.1
IG Petrochemicals Ltd. Chemicals ₹1,477.07 ₹484.60 6.34
Krishana Phoschem Ltd. Fertilizers ₹1,454.80 ₹470.60 54.41
EIH Associated Hotels Ltd. Hotel, Resort & Restaurants ₹1,421.34 ₹465.45 117.78
Insecticides (India) Ltd. Pesticides & Agrochemicals ₹1,410.63 ₹476.90 12.29
Goodluck India Ltd. Steel & Iron Products ₹1,243.16 ₹456.60 14.79
Infobeans Technologies Ltd. IT – Software ₹1,148.76 ₹474.00 23.61
Steelcast Ltd. Castings,Forgings ₹1,006.64 ₹497.35 16.61

In Closing

Investors have always been fascinated by small-cap stocks. They have immense potential and it is much more viable for small companies to double in growth than large companies, which has saturated by growth and market share in a particular business sector. But at the same time, small-cap stocks carry immense risk, capable of decimating complete investor wealth. Finding a stock, that is balanced between the two, is a skill that takes knowledge and perseverance. Happy Investing!

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