Indexbom: Sensex vs. Indexbom: BSE-SMLCAP – Which Segment Offers Better Returns in 2025?

Indian stock indices indicate the performance of different segments of the market. By grouping stocks by size, sector or theme, indices help you to quickly gauge the performance of a specific market segment.

For example, the indexbom: Sensex tracks large, established companies across multiple sectors and reflects the overall performance of the stock market as a whole. The indexbom: BSE-SMLCAP, on the other hand, reveals the performance of companies within the small-cap market segment. Tracking these two indices is crucial for understanding the market's health as they offer unique insights into the economy and investor sentiment.

In this article, we will be exploring these two Indian stock indices in detail. Additionally, we will also be comparing them to find out which among them offers better returns in 2025. With economic conditions shifting, this market index comparison becomes especially relevant and can help you with your decision-making.

Understanding Indexbom: Sensex

The indexbom: Sensex is the most widely followed market index in India. It features the most prominent and financially stable companies listed on the Bombay Stock Exchange. To understand its role, you must look at its composition and historical behaviour.

As India’s benchmark index, the indexbom: Sensex tracks 30 of the largest and most actively traded stocks on BSE. These "blue-chip" companies are often leaders in their respective sectors. The index is weighted by free-float market capitalisation. This essentially means that larger companies have more impact on the index.

As of September 2025, the index features companies from 11 key sectors of the Indian economy. Let us look at the list of sectors that the Sensex tracks and their respective weightage. 

1. Financial Services - 39.58%

2. Consumer Discretionary - 12.95%

3. Information Technology - 10.99%

4. Energy - 9.72%

5. Fast Moving Consumer Goods - 6.44%

6. Industrials - 6.03%

7. Telecommunications - 5.41%

8. Utilities - 3.05%

9. Commodities - 2.98%

10. Healthcare - 1.77%

11. Services - 1.09%

The top 10 constituents of the indexbom: Sensex, along with their respective weightage as of September 2025, are as follows. 

1. HDFC Bank Limited - 15.18%

2. ICICI Bank Limited - 10.13%

3. Reliance Industries Limited - 9.72%

4. Infosys Limited - 5.42%

5. Bharti Airtel Limited - 5.41%

6. Larsen & Toubro Limited - 4.5%

7. ITC Limited - 4.08%

8. State Bank of India Limited - 3.82%

9. Axis Bank Limited - 3.4%

10. Mahindra & Mahindra Limited - 3.19%

Historically, the indexbom: Sensex has provided steady, long-term growth. Its risk profile is considered moderate compared to the broader market. While it experiences downturns during economic slumps, the blue-chip nature of the index offers some resilience. 

As a result, long-term investors often turn to it for stability and capital appreciation. To put things into perspective, here is a quick look at the annualised returns and annualised risk-adjusted returns for the index as of September 2025. 

Table 1: Annualised Returns and Annualised Risk-Adjusted Returns of Sensex 

Understanding Indexbom: BSE-SMLCAP

While the Sensex tracks the giants, the indexbom: BSE-SMLCAP focuses on the opposite end of the market segment. This index features smaller companies that are often in their early stages of growth.

The BSE SmallCap index represents the companies from the small-cap market segment listed on the exchange. Unlike the Sensex, the indexbom: BSE-SMLCAP is comprehensive and features over 800 stocks. Because of its broad composition, the index provides you with a wide-angle view of the high-growth segment of the Indian economy.

As of September 2025, the BSE’s small-cap index features companies from several sectors. Here are 12 of the top sectors that the BSE SmallCap index represents and their respective weightage. 

1. Industrials - 22.19%

2. Consumer Discretionary - 21.06%

3. Financial Services - 15.50%

4. Commodities - 12.15%

5. Healthcare - 12.07%

6. Fast Moving Consumer Goods - 4.35%

7. Information Technology - 4.11%

8. Services - 3.30%

9. Utilities - 2.08%

10. Energy - 1.45%

11. Telecommunications - 1.20%

12. Diversified - 0.55%

The top 10 constituents of the BSE SmallCap Index, along with their respective weightage as of September 2025, are as follows. 

11. Fortis Healthcare Limited - 1.12%

12. Multi Commodity Exchange of India Limited - 1%

13. Blue Star Limited - 0.92%

14. KEI Industries Limited - 0.82%

15. J.K. Cement Limited - 0.68%

16. 360 One Wam Limited - 0.66%

17. Radico Khaitan Limited - 0.63%

18. National Aluminium Company Limited - 0.59%

19. Computer Age Management Services Limited - 0.56%

20. Brigade Enterprises Limited - 0.55%

The primary attraction of small-cap stocks is their high growth potential. These companies have more room to expand compared to large-cap giants. However, this potential comes with significantly higher volatility. Their stock prices can experience sharp movements in both directions. This makes the BSE SmallCap index a higher-risk, higher-return proposition for investors.

Therefore, investment in the indexbom: BSE-SMLCAP is typically suited for investors with a high-risk tolerance and a long-term investment horizon. You must be prepared to endure market volatility to capture the potential for high returns. It is often used by investors who want to add an aggressive growth component to a well-diversified portfolio. 

Here is a table outlining the annualised returns and annualised risk-adjusted returns for the index as of September 2025. 

Table 2: Annualised Returns and Annualised Risk-Adjusted Returns of the BSE SmallCap Index 

Performance Comparison

A Sensex vs. SmallCap comparison is critical for positioning your portfolio for the coming year. How these indices performed in the past provides context. At the same time, the outlook for 2025 depends on a fresh set of economic factors.

When you compare the annualised returns of the BSE SmallCap index with that of the indexbom: Sensex, you will find that the small-cap segment has outperformed during strong economic expansions or bull markets. 

In contrast, during economic downturns or periods of high uncertainty, the Sensex has proven to be more resilient, falling less than the small-cap index. Since the market often moves in a cyclical pattern, it is essential to analyse multi-year returns instead of just single-year figures.

Key Factors Influencing Large-Cap vs. Small-Cap Movements

The movement of the large-cap segment is often tied to global trends, institutional fund flows and major economic policies. Furthermore, the indexbom: Sensex is also sensitive to interest rate changes and inflation data. 

Small-cap stocks, meanwhile, are more influenced by domestic economic activity, credit availability and individual company performance. The indexbom: BSE-SMLCAP can be more insulated from macroeconomic and global shocks, but is more vulnerable to local economic slowdowns.

Expert Outlook for 2025

The outlook for the year 2025 depends primarily on two factors: inflation and earnings growth. If inflation moderates and interest rates decline, it could boost domestic demand. This would benefit small-cap companies greatly. 

However, if global uncertainty remains high, investors might prefer the relative safety of the large-cap Sensex index. Furthermore, the corporate earnings reports are likely to be monitored closely. Strong revenue and profit growth metrics could boost either of the two Indian stock indices. On the other hand, if quarterly earnings do not meet the market’s expectations, the indices could potentially decline. 

Risk-Return Trade-Off       

Choosing between these Indian stock indices requires you to understand the balance between risk and potential reward. When you make a market index comparison, you should not just focus on returns alone. In fact, you should also take into account the level of risk you take to achieve the returns. 

The Sensex vs. SmallCap comparison highlights different risk profiles. For example, the BSE SmallCap index inherently carries higher volatility, as clearly outlined in Table 2. Furthermore, small-cap stocks also have lower liquidity, which can make it harder to sell large positions quickly. However, this segment offers significant long-term growth potential. 

In contrast, the Sensex provides more stability and high liquidity, with more moderate but steady long-term growth, as evidenced by Table 1. The stocks featured in the indexbom: Sensex are highly liquid and can be bought and sold quickly within just a few minutes.   

As an investor, you should prefer the indexbom: Sensex if your primary goal is capital preservation and steady, long-term wealth creation. It is ideal for conservative and moderate-risk investors. On the other hand, you could consider the indexbom: BSE-SMLCAP if you have a high-risk appetite and a long-term horizon.

Investor Takeaway

A market index comparison of these two indices shows that they serve entirely different purposes. The Sensex offers stability and liquidity, whereas the small-cap index provides a path to high growth, but it comes with substantial volatility and risk. Neither of the two is universally "better". In fact, the right choice depends entirely on your personal risk tolerance and investment timeline.

Many successful investors build portfolios that include both large-cap and small-cap exposure. Combining the stability of the indexbom: Sensex with the growth potential of the BSE SmallCap index can provide valuable diversification. This balance can help you manage overall risk while still capturing growth opportunities.

That said, market conditions can change very quickly. To succeed in such a fast-paced environment, you must monitor the Sensex today and follow live small-cap movements. Samco Securities provides you with real-time market data and expert analysis. With live market updates from Samco, you can stay informed about which segment is gaining momentum and make timely adjustments to your investment strategy.

Conclusion

Ultimately, both the Sensex and the BSE SmallCap index are crucial Indian stock indices that offer different paths to wealth creation. The Sensex provides stability, whereas the SmallCap index has high growth potential. 

As you plan for 2025, it is advisable to consistently track the performance of both the indexbom: Sensex and the indexbom: BSE-SMLCAP. Use the real-time insights available from trusted sources like Samco to make informed decisions that align with your long-term financial objectives.