Small-cap stocks, June 9 -- There's a popular adage in the stock market -Prices are a slave to earnings. But this doesn't seem to hold true in the case of the small-cap stocks that have been in an upward trend for four straight months despite a sharp miss in the March quarter earnings.

The overall PAT for the small-cap stocks was down 16% year-on-year, significantly worse than the already muted expectations. Despite that, in the financial year 2025-26 alone (FY26), the BSE Smallcap index has gained nearly 15%, adding over Rs.9 lakh crore to investor wealth, according to Bloomberg data, raising concerns that the current bullish trend is likely built on shaky ground. Potential for high returns in a short period has powered the small-cap ra...