Top 3 Stocks from Nifty Small-Cap 100 Index to Watch in May

It was an excellent Friday and week for the Nifty Smallcap Index. The Nifty Smallcap 100 index surged by 4.37% over the week, closing higher in all five trading sessions, with Friday’s session ending at a record high.

Interestingly, besides the small-cap index, the India VIX (the volatility gauge for Indian markets) attracted attention as it fell to a low of 10. This low reading on the VIX reflects a sense of complacency among market participants. Historically, major market tops are formed when the VIX remains at its lowest levels for a prolonged period, supporting the saying, “Sell in May and go away.” Considering this historical context, a cautious approach is advisable, emphasizing the importance of vigilance when choosing stocks. Here are the three small-cap stocks you should watch for in May:

1. Exide Industries

Exide Industries has demonstrated strong performance in May, with an average return of 11.22%. Out of 22 instances, the stock has delivered positive returns 14 times, with a success rate of almost 64%. Recently, the company signed a memorandum of understanding with Hyundai Motor Co. and Kia Corp for electric vehicle battery localization in India, marking its first strategic partnership in India’s EV market. This development makes Exide Industries a stock worth monitoring.

2. City Union Bank

City Union Bank is a private sector bank with a history of delivering solid returns in May. Out of 22 instances, the stock has yielded positive returns 16 times, resulting in a success rate of over 70%. The average change for the month of May is 10.87%, making City Union Bank an attractive addition to your watchlist.

3. Zensar Technologies

Zensar Technologies recently released its Q4FY24 and full-year FY24 earnings. The company reported sequential growth of 2.4% in reported currency and 2% in constant currency during Q4FY24. For the full year FY24, Zensar Technologies recorded 1.3% year-over-year growth in constant currency. In May, the stock has a success rate of 64% and an average gain of 7.85%. This makes it a notable stock to watch in the small-cap space for the coming month.

These three small-cap stocks offer a diverse range of opportunities and are worth keeping on your radar in May.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.