March’s Mid & Small-Cap Winners: 10 Nifty Stocks That Gained Over 20%

The Indian stock market witnessed a strong resurgence in mid and small-cap stocks, with indices showing continued strength over the past few trading sessions. On Wednesday, the Nifty Midcap 150 index gained 2.37%, the Smallcap 250 rose 2%, and the Microcap 250 climbed 2.2% by the close. Over the last three trading sessions, all three indices are up between 4.7% and 5.2%, outperforming the Nifty 50’s 2.25% rise over the same period.

The broader market recovery has been driven by subsiding foreign investor selling, a pullback in the dollar index levels from 110 to 103, and improving technical indicators suggesting further potential upside. However, analysts and experts question whether the current rally is sustainable in the long term or merely a short-term rebound following a six-month-long decline. 

Top 10 Mid & Small-Cap Gainers in March

Index	Company Name	CMP (₹)	Gain in March (%)
NIFTY MIDCAP 150
	Lloyds Metals & Energy	1249.5	27.1
	Bharat Dynamics	1198	22.3
	Uno Minda	1012.6	22.2
	Mazagon Dock Shipbuilders	2625.3	21.9
	NLC India	248.6	21.6
NIFTY SMALLCAP 250
	Jyoti CNC Automation	1076.9	39.7
	Garden Reach Shipbuilders	1641.4	35.2
	Kirloskar Oil Engines	734.2	26.9
	Chennai Petroleum Corp	573.4	26.8
	Doms Industries	2935.2	24.2

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Nifty Midcap 150 Performers

1. Lloyds Metals & Energy (27.1%)

Lloyds Metals & Energy led the midcap space with a 27.1% gain in March, fueled by increased investor interest in the metals and mining sector. Improved production numbers and strong commodity demand have supported the stock’s upward trajectory.

2. Bharat Dynamics (22.3%)

The defense sector has remained in focus, and Bharat Dynamics benefited from rising defense allocations and new contract wins. This month, the stock gained 22.3%, reflecting optimism in government-driven defense spending.

3. Uno Minda (22.2%)

Auto ancillary stocks have performed well, and Uno Minda, a leading player in automotive components, surged 22.2% on expectations of robust earnings growth and strong domestic automobile demand.

4. Mazagon Dock Shipbuilders (21.9%)

Another defense sector stock, Mazagon Dock, posted a 21.9% gain in March, supported by its growing order book and strategic importance in naval defense.

5. NLC India (21.6%)

The power generation and mining company climbed 21.6%, boosted by positive sentiment around the energy sector and government infrastructure spending.

Nifty Smallcap 250: Top Gainers

6. Jyoti CNC Automation (39.7%)

Jyoti CNC Automation, the biggest gainer in the small-cap space, jumped 39.7% in March, fueled by strong earnings and increasing demand for its industrial machinery products.

7. Garden Reach Shipbuilders (35.2%)

The surge in defense stocks extended to Garden Reach Shipbuilders, which gained 35.2% on the back of rising defense expenditure and strong order inflows.

8. Kirloskar Oil Engines (26.9%)

A key player in engineering and power solutions, Kirloskar Oil Engines gained 26.9%, supported by strong financials and rising industrial demand.

9. Chennai Petroleum Corporation (26.8%)

Rising crude oil prices and strong refining margins led to a 26.8% increase in Chennai Petroleum’s stock price. The company has benefited from higher refining throughput and improved operational efficiency.

10. Doms Industries (24.2%)

Doms Industries, a consumer goods and stationery manufacturer, saw 24.2% gains due to robust sales and expansion in new markets.

From 27 September 2024 to 3 March 2025, mid and small-cap indices witnessed a steep decline:

• The Nifty Midcap 150 index fell by 20.5%,
• The Nifty Smallcap 250 dropped by 25.4%,
• The Nifty Microcap 250 declined by 25%.

With the recent rally, some of these losses have been recovered, and several stocks have posted gains exceeding 20% in March alone.

Why Are Mid & Small Caps Rallying?

Several key factors drive the recent surge in mid and small-cap stocks:

1. Increased Retail Participation

Retail investors have significantly contributed to the rally, shifting their focus from large-cap stocks to higher-growth opportunities in smaller companies.

2. Mutual Fund Inflows at Record Highs

Mid and small-cap mutual funds have seen consistent inflows, with investments exceeding ₹30,000 crore in the last fiscal year. The Systematic Investment Plan (SIP) model has played a crucial role in ensuring steady liquidity in these segments.

3. Strong Growth in Select Sectors

Industries such as defense, infrastructure, engineering, and oil & gas have outperformed, driven by government policies, rising demand, and strong earnings.

4. Rotation from Large Caps to Broader Markets

With limited movement in Nifty 50 and Sensex, institutional and retail investors have shifted focus to mid and small-cap stocks for better return potential.

5. Momentum & FOMO-Driven Buying

Many retail investors have entered the market, chasing momentum stocks, further boosting the uptrend. However, this also increases the risk of speculative excesses.

Global Macroeconomic Factors

The performance of mid and small-caps is also linked to global economic trends:

• US Federal Reserve’s interest rate decisions could influence investor sentiment.
• Crude oil price fluctuations may impact stocks in the energy and manufacturing sectors.
• Geopolitical risks and foreign fund flows could drive volatility.

Are Mid & Small-Caps Overheating?

Despite the rally, concerns remain over the valuation levels and market sustainability:

• The Nifty Midcap 150 index trades at a P/E ratio above 30x, exceeding its historical range of 20-22x.
• Some small-cap stocks have doubled in value within months, even without substantial changes in their fundamentals.

Historically, such sharp gains have been followed by corrections, raising concerns about overvaluation and speculative bubbles.

Conclusion

The mid and small-cap rally in March has been impressive, with several stocks gaining over 20% amid improving sentiment and strong sectoral tailwinds. However, valuation concerns and regulatory warnings indicate the need for caution. While select companies continue to show robust earnings growth, the broader rally remains susceptible to global factors and liquidity-driven volatility.

The coming weeks will determine whether this rally is a sustained uptrend or a temporary bounce in a volatile market.

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