Hind Rectifiers Ltd has done a sales of Rs. 100 Crores in last 1 year (2.2 times the market cap) and a net profit of 10.5 Crores ( .25 times the market cap) . Compare this with Reliance Ind. Reliance has done a sales of 150000 Crores (.75 times market cap) and a net profit of Rs. 15000 Crores ( .075 times market cap). 

That is, buying a stock is like buying stake in a business. If you are buying a small cap, you end up paying far less for each rupee of sales or net profit company earns for the portion of your stake.