Top 3 small-cap stocks to watch in July 2023

June has been a momentous month for the Indian stock market, with both the Nifty and Sensex reaching new all-time highs. The Nifty has recorded a gain of over 3% during this period, sparking enthusiasm among market participants. As we step into July, optimism continues to prevail for several reasons. The southwest monsoon, after a slow start, has picked up pace, significantly reducing the rainfall deficit. Additionally, the influx of foreign institutional investments (FIIs) has been robust. 

Against this backdrop, let’s explore the small-cap stocks that market participants should keep a close eye on in July.  

A Historical Perspective 

Before delving into specific stocks, let’s examine the historical performance of the Nifty in July over the past decade. Remarkably, out of the last ten years, the Nifty has only delivered negative returns twice, in 2013 and 2019. On average, the Nifty has recorded a gain of 2.6% in July since 2002. This historical data instils further confidence in market participants as they enter this month.  

Top Three Small-Cap Stocks to Watch:  

Conducting a seasonality analysis, we have identified three small-cap stocks that have historically performed well in July. Based on their track record, these stocks show potential for generating significant returns and warrant careful consideration. 

1. Bliss GVS Pharma: Bliss GVS Pharma emerges as a compelling choice for investors seeking to capitalize on July’s potential. Over the years, the stock has demonstrated impressive performance, with an average gain of nearly 29% and a remarkable positivity rate of 85.7% during this month. In 18 out of 21 instances, Bliss GVS Pharma has closed the month in the green. Notably, the stock has shown three consecutive years of positive growth, making it an enticing prospect for investors. 

2. N.R Agarwal Industries: Another stock that stands out is NR Agarwal Industries. This small-cap stock has consistently delivered positive returns in July, boasting an 85.7% positivity rate over 21 instances. The average gain registered by N.R Agarwal Industries in July is an impressive 15.11%, with its maximum returns for the month soaring to a remarkable 44%. These figures, combined with the stock’s historical performance, make it an intriguing choice for investors looking for potential gains. 

3. Nesco: Nesco, known for rewarding its shareholders, emerges as a stock with strong potential for hefty gains in July. With an average return of 19.32% and a positivity rate exceeding 80%, Nesco has consistently delivered positive returns during this month. Investors may find solace in the stock’s historical performance, which suggests a high likelihood of further growth in July.

Conclusion 

As we embark on the month of July, market participants are brimming with optimism. The positive turn of events, including an upswing in the southwest monsoon and the steady flow of FIIs, bodes well for the Indian stock market. By analysing the historical performance of small-cap stocks, we have identified three noteworthy candidates—Bliss GVS Pharma, N.R Agarwal Industries, and Nesco—that exhibit promising potential for the month ahead. While history does not guarantee future results, keeping a watchful eye on these stocks could offer investors opportunities for fruitful returns in July.