Smallcaps have surged 2.3x since April 2023. Why Vikas Khemani still sees India’s next multibaggers here

India’s smallcap segment has delivered a sharp rise since April 2023, increasing 2.3 times. The gains have kept the segment in focus as investors assess where the country’s next major wealth creators could emerge.

Vikas Khemani continues to see potential for India’s next multibaggers among smallcap companies. The outlook is supported by a stronger projected earnings trajectory compared with large-cap stocks.

Profit growth expected to outpace large caps

Smallcaps are expected to record annual profit growth of 22% between FY26 and FY28. That compares with a projected 16% annual growth rate for large caps over the same period.

The five-percentage-point difference gives smallcaps a more favorable earnings-growth outlook in the forecast period. It also provides the main basis for the continued focus on the segment, following its substantial rise since April 2023.

What the outlook means

The projections indicate that smallcaps are expected to expand profits faster than large-cap companies through FY28. However, the available information does not provide details on individual companies, sectors, valuations or the factors behind the estimates.

For now, the key figures are the segment’s 2.3-times increase since April 2023 and its expected 22% annual profit growth between FY26 and FY28. Together, they explain why smallcaps remain central to the discussion about India’s potential future multibaggers.