Top 10 Export-Focused Small-Cap Stocks Surge with Mutual Fund Backing

Baishakhi Mondal

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Top 10 Export-Focused Small-Cap Stocks Surge with Mutual Fund Backing

Exploring the Emerging Theme of Export-Focused Mutual Funds

Introduction: The world of mutual funds is evolving, with new themes coming to the forefront as investors seek lucrative opportunities. A fresh theme gaining traction in the stock market is ‘export’. Recently, HSBC Mutual Fund introduced the ‘HSBC India Export Opportunities Fund’, aimed at investing in companies that significantly benefit from exporting goods and services. One standout in this domain is the ‘ICICI Prudential Exports and Services Fund’, boasting over a decade of remarkable performance with returns exceeding 20%. As the trend unfolds, other fund houses are likely to create similar investment strategies.

India’s Export Landscape

India has emerged as one of the fastest-growing service-exporting nations on a global scale. With a target of achieving US$2 trillion in exports by 2030, the country is on a robust growth trajectory. Notably, Indiaโ€™s exports are increasing at 15% annually, while the nominal GDP is growing at a rate of 10%. This growth creates a fertile ground for mutual funds focusing on export-driven companies.

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Top Export-Oriented Smallcap Stocks

Below is a comprehensive table outlining ten smallcap stocks with a significant portion of their revenue stemming from exports. Mutual fund schemes have also shown considerable interest in these equities, with substantial investments as of August 31, 2024.

Company Name Export Contribution (%) Active Mutual Fund Schemes Industry Sector
Birlasoft 60% 94 IT – Software
Suven Pharmaceuticals 58% 90 Pharmaceuticals and Biotechnologies
Zensar Technologies 42% 88 IT – Software
Aster DM Healthcare 35% 278 Health Care Services
Gokaldas Exports 35% 83 Textiles and Apparels
RateGain Travel Technologies 32% 99 IT – Software
Granules India 26% 95 Pharmaceuticals and Biotechnologies
Orchid Pharma 26% 81 Pharmaceuticals and Biotechnologies
Swan Energy 25% 85 Diversified
Firstsource Solutions 24% 100 Commercial Services and Supplies

Conclusion

The focus on export-oriented mutual funds is not just a passing trend but a reflection of India’s increasing prominence in global trade. As the nation aims for ambitious export targets, investors may find valuable opportunities within these specialized funds and the underlying companies. As more fund houses explore similar themes, the investment landscape is set to become increasingly competitive, providing a host of options for savvy investors aiming to capitalize on Indiaโ€™s export growth.

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