New Delhi, June 2 -- India's small-cap segment has shown remarkable resilience in recent months, outperforming broader market benchmarks despite heightened volatility and concerns around valuations. While the Nifty 50 declined around 2.5% in May, the Nifty Smallcap index was nearly flat, slipping just 0.15%.

The contrasting performance has drawn investor attention and raised an important question: what is supporting small-cap stocks when benchmarks are under pressure?

A recent study by Bajaj Finserv AMC suggests that the answer lies in a combination of improving fundamentals, healthier balance sheets, attractive valuations and expectations of an earnings recovery. According to the fund house, the small-cap universe has undergone a struc...