Massive selloff in Tejas Networks and SML Isuzu: Why these stocks crashed on April 28, 2025!

Indian stock indices rose sharply on April 28, 2025, driven by strong earnings reports from major companies like Reliance Industries and positive global cues. However, even as the benchmark BSE Sensex and NSE Nifty 50 closed higher, a number of mid-cap and small-cap stocks tumbled, highlighting lingering sectoral weaknesses and investor caution. Among the worst-hit were Tejas Networks, SML Isuzu, and Avantel, alongside other companies from diverse sectors, revealing underlying microeconomic stress amid broader optimism.

Why Did Tejas Networks Shares Crash Nearly 13%?

Tejas Networks Ltd. recorded the steepest fall of the day, losing 12.92% to end at ₹748.00 after opening at ₹749.15 and reaching a high of ₹784.85. The stock’s sharp correction was driven by the company’s disappointing quarterly results, with a consolidated net loss of ₹71.80 crore for the March 2025 quarter, ending a five-quarter profit streak. The losses were primarily attributed to large provisions for inventory obsolescence and intangible asset write-downs, sparking concerns over operational inefficiencies. Although Tejas Networks reported a 43.7% revenue surge to ₹1,906.9 crore, its EBITDA margin contracted steeply to 6.4% from 23.3% a year ago, severely shaking investor confidence.

Mahindra & Mahindra’s Stake in SML Isuzu: Investor Reactions

SML Isuzu Ltd. faced a brutal 10% cut, falling to ₹1,596.10. The selloff followed Mahindra & Mahindra’s announcement of acquiring a majority stake in SML Isuzu for ₹5.55 billion. Despite the strategic synergies expected from this acquisition, investors expressed disappointment over the valuation offered, seeing it as a discount to SML Isuzu’s intrinsic potential, which triggered the stock’s maximum lower circuit hit during the session.

Avantel Shares Drop Amid Sector Sensitivity

Shares of Avantel Ltd. declined by 9.88% to ₹117.00. While no major company-specific development was reported during the day, the defense communications and aerospace sector remains under pressure amid shifts in government procurement priorities and concerns about spending reductions linked to fiscal consolidation efforts, which weighed heavily on sentiment for companies like Avantel.

Associated Alcohols, Repro India, Kamath Hotels Also Among Heavy Decliners

Associated Alcohols & Breweries Ltd. witnessed a sharp drop of 11.89% to close at ₹1,135.00. Investors appeared increasingly jittery about liquor sector stocks following reports of possible tightening in state-level excise regimes across key markets. Repro India Ltd., operating in the publishing sector, fell 8.79% to ₹501.00 amid concerns over moderating educational content demand and digital disruption. Kamath Hotels Ltd., a player in the hospitality industry, recorded a fall of 8.71% to ₹245.25, reflecting worries over lower-than-expected summer travel bookings and elevated operational costs despite the broader tourism sector recovery narrative.

Broader Market Context: Why Are Some Stocks Falling Despite Index Gains?

April 28 saw strong headline index growth, with the BSE Sensex and NSE Nifty gaining approximately 1% following better-than-expected results from Reliance Industries and positive cues from global markets. However, mid- and small-cap stocks, which typically exhibit higher volatility, saw significant selling pressure. Analysts attributed this to profit-booking after recent rallies, uneven quality of earnings among smaller companies, and increasing selectivity among foreign institutional investors who are favoring large-cap, high-visibility names amid lingering global macroeconomic uncertainties. Rising oil prices and mixed domestic inflation readings also fed into fears that corporate margins could come under renewed pressure in the coming quarters.

The Other Major Losers: Company-Specific Weaknesses Persist

National Capital Region Urban Transport Corporation Ltd. (NATCAPSUQ) dropped by 8.67% to ₹197.62. Although public sector enterprises have generally benefited from the government’s infrastructure push, specific concerns over project execution timelines and funding clarity weighed on the stock. Global Vectra Helicorp Ltd. (GLOBALVECT) shed 7.88% to ₹215.00, as aviation sector companies faced margin risks from higher aviation turbine fuel costs. Vimta Labs Ltd. (VIMTALABS) fell by 7.17% to ₹1,011.00, following a mixed earnings performance, raising concerns about the near-term outlook for contract research and diagnostics services.

Lloyds Engineering Works Ltd. (LLOYDSENGG) lost 6.59% to ₹59.09, suggesting some investors are booking profits in industrial and infrastructure-focused counters despite the overall optimism surrounding the government’s capex cycle. Times Guaranty Ltd. (TIMESGTY) declined 6.51% to ₹160.11 in a subdued real estate financing environment. SoftTech Engineers Ltd. (SOFTTECH) fell by 6.32% to ₹340.00 amid muted sentiment toward niche engineering tech plays. Ind-Swift Laboratories Ltd. (INDSWFTLAB) saw its shares decline 6.22% to ₹75.50, reflective of broader pressures in the mid-cap pharma space from regulatory uncertainties and export market challenges.

Shriram Housing Finance Ltd. (SRGHFL) dropped 6.07% to ₹312.00, suggesting selective selling even within the generally buoyant housing finance sector. Butterfly Gandhimathi Appliances Ltd. (BUTTERFLY) slipped 5.92% to ₹659.00 as appliance makers continue to struggle with inflation-led demand pressures. Modi Rubber Ltd. (MODIRUBBER) declined 5.73% to ₹136.50, while Country Club Hospitality & Holidays Ltd. (CCHHL) closed 5.47% lower at ₹15.90, each facing sector-specific stresses.

Super Spinning Mills Ltd. (SUPERSPIN) recorded a 5.36% loss to ₹10.59 amid persistent struggles for textile exports. GATECH fell 5.33% to ₹0.71, a typical example of penny stock volatility in uncertain times. RPG Life Sciences Ltd. (RPGLIFE) declined by 5.32% to ₹2,125.00 despite a generally strong outlook for pharmaceutical majors, indicating that even selective names are not immune from near-term sell-offs.

Economic and Policy Factors Influencing Stock Movements

Investor behavior on April 28, 2025, reflected broader concerns around the Reserve Bank of India’s upcoming monetary policy review, in which the central bank is widely expected to retain a cautious stance due to uneven inflation trends. Moreover, the global rise in oil prices rekindled fears of input cost pressures for Indian corporates, while new regulatory scrutiny over sectors such as alcohol, aviation, and real estate financing further fueled sectoral divergence. Internationally, mixed signals from the US Federal Reserve about future rate paths kept risk appetite capped in emerging markets like India.

Sentiment Analysis: Are FIIs Turning Selective Again?

Despite net positive foreign institutional inflows during April 2025, there is growing evidence that FIIs are concentrating their bets in blue-chip sectors such as technology, private banking, and energy, rather than broad-based exposure across mid-caps and small-caps. Several brokerages including ICICI Securities and Motilal Oswal Financial Services reiterated their stance that investors should prioritize quality earnings visibility over momentum plays. As a result, mid-cap and micro-cap counters are witnessing more frequent profit-taking, reflecting a clear shift in market dynamics post the earnings season.

While headline indices like Sensex and Nifty 50 demonstrated strength on April 28, 2025, the underperformance among mid-cap and small-cap names highlights the nuanced reality of Indian equities. The divergence suggests that while India’s long-term economic growth prospects remain intact, investors need to remain vigilant about sector-specific challenges, corporate earnings quality, and evolving macroeconomic risks when allocating capital.