The Nifty Smallcap 100 index saw a remarkable 18.4% increase in April 2023, marking its third-highest monthly gain since its inception in March 2011. Historical trends indicate that when the index rises more than 15% in a month, it typically continues to gain over the next 12 months. In fact, in six out of the last seven instances of such monthly gains, the index posted further profits. However, current valuations of small-cap stocks are above historical averages, which may limit future upside potential. Jyotivardhan Jaipuria, founder and managing director at Valentis Advisors, expressed a positive long-term outlook for small caps over the next 18-24 months, but cautioned that high valuations could cap gains below historical medians. Abhilash Pagaria, head of Alternative & Quantitative Research at Nuvama Wealth, noted that while there is potential for a 5-7% upside in the coming months, a spike in oil prices above $125 could lead to market sell-offs.