Mirae Asset Sharekhan says the correction has improved risk-reward materially but valuations are not uniformly inexpensive and there are pockets where valuations have corrected much more than the earnings outlook suggests. The Nifty 50’s one-year forward multiple at ~17x is lower than the 10-year average. This makes the next year a stock-picker’s market, where businesses with strong fundamentals, earnings visibility and reasonable valuations should be better-placed to generate returns. Here are 5 smallcap stocks the brokerage is bullish on?
With a target price of Rs 750 per share, the brokerage implies an upside potential of 37% from current levels. Analysts say the company is rapidly emerging as a highly specialized and critical energy infra provider and is enjoying sector tailwinds in HRSG, thermal and oil & gas-based solutions. The company highlighted strong demand visibility from GE Vernova, Nooter/Eriksen, Siemens, and other global OEMs linked to rising gas turbine and power infrastructure demand driven by AI data centers and global electricity shortages.
The private lender has a target price of Rs 415, an upside of 33% from current market levels. Analysts note that the stock is trading at around 0.7 times its FY28E price-to-book value (P/BV), making it the cheapest among old private-sector and mid-cap peers, which trade at an average of around 1.4 times. This valuation discount is largely attributed to its historically sub-1% return on assets (RoA).
With a target price of Rs 2,490, the brokerage implies an upside of 22% from current market levels. Lumax is confident of outperforming the industry despite inflationary headwinds as an increase in content per vehicle drives up market share. Revenue guidance raised to ~Rs. 6,000 crore and margins are expected to sustain in FY27 while long-term target of achieving a 20% revenue CAGR and 20% EBITDA margins by FY31 remain intact.
The brokerage has pegged the target price at Rs 53, an upside of 17% from current market levels. While the provider business currently contributes only ~10% of revenue, the management is accelerating investments in this vertical through a dedicated GTM strategy and the acquisition of Chirok Health. Chirok adds $13mn in TTM revenue, 35.8% adjusted EBITDA margins, 115% net revenue retention, and strengthens Sagility’s end-to-end RCM capabilities, creating significant cross-selling opportunities.