In April, India's small-cap stocks experienced a remarkable recovery, with the Nifty Smallcap 250 index climbing 17.1%, the highest monthly gain since its inception in April 2016. This rally followed a challenging March, during which the index fell 10%, attributed to a sell-off triggered by geopolitical tensions in West Asia. The rebound has been fueled by local investors capitalizing on perceived undervaluation in small-cap stocks, particularly in companies like HFCL and Ola Electric Mobility, which saw gains between 56% and 71%. Analysts suggest that while the momentum favors small-caps, opinions vary on the sustainability of this trend. Some predict that the index may face a correction of up to 30% from current levels, as it is now trading close to its fair value. However, others believe that the index could continue to rise, supported by reasonable valuations and strong growth prospects.