# Smallcaps surge 2.3x since April 2023

> Smallcaps have surged 2.3x since April 2023, but Vikas Khemani says they remain India's best growth story.
- Title: Smallcaps surge 2.3x since April 2023 · The Economic Times
- Summary: Smallcaps have surged 2.3x since April 2023, but Vikas Khemani says they remain India's best growth story.
- Keywords: smallcap stocks, vikas khemani, carnelian capital, multibagger stocks, smallcap valuation, smallcap earnings growth, smallcap mutual fund, indian stock market, money, business, Smallcaps, surge
- Source: The Economic Times — https://economictimes.indiatimes.com/markets/stocks/news/smallcaps-have-surged-2-3x-since-april-2023-why-vikas-khemani-still-sees-indias-next-multibaggers-here/articleshow/134889046.cms
- Author: Nikhil Agarwal
- Published: 2026-10-12T09:55:00+00:00
- Read time: 1 min
- Topics: smallcap stocks, vikas khemani, carnelian capital, multibagger stocks, smallcap valuation, smallcap earnings growth, smallcap mutual fund, indian stock market, money, business
## Smallcaps surge 2.3x since April 2023
Smallcap market value has grown 2.3 times since April 2023, compared with a 1.4 times increase for largecaps.
## Smallcaps trade at 32.5x earnings
Smallcaps trade at 32.5 times trailing earnings, compared with 21 times for largecaps.
## Smallcaps expected to grow profits 22% annually
Smallcaps are expected to grow profits at a 22% annual rate between FY26 and FY28, compared with 16% for large caps.
## Smallcaps offer purer domestic India exposure
Around 59% of smallcap profits come from India’s domestic, non-financial economy, including factories, hospitals, retailers and builders.
## Smallcaps dominate healthcare and industrials
Healthcare accounts for 12% of small and midcaps compared with 5% for largecaps. Industrials account for 17% versus 13%.
## Smallcaps outperform global businesses
Between FY23 and FY26, largecap global businesses grew revenue by just 1.8% annually, while their domestic businesses grew 12.4% annually.
## Smallcaps hold emerging Indian themes
None of the nine listed electronics manufacturers and none of the 13 railway companies in Carnelian’s universe are large caps.
## Smallcaps show strong growth potential
Between FY16 and FY26, 279 smallcaps compounded profits at more than 20% annually, compared with only 13 largecaps.
## Smallcaps have high growth dispersion
Since April 2023, 354 smallcaps have more than tripled, while 171 have delivered negative returns.
## Smallcaps face higher risk
Smallcaps tend to fall harder during market corrections and can take years to recover.
## Carnelian launches smallcap mutual fund
Carnelian Capital plans to launch the Carnelian Small Cap Mutual Fund, marking its entry into the category.
## Key takeaway

Smallcaps have surged 2.3x since April 2023, but Vikas Khemani argues they remain the most direct way to participate in India's domestic growth story.