7 Best Small Cap Stocks To Buy In India

Posted By:
Subscribe to GoodReturns

While the Sensex has been grinding for the last few weeks near the 30,000 points levels, the small cap index has slowly outperformed. These stocks tend to perform well and have the potential to rally. There are many stocks that are undervalued and have the potential to generate returns.

Here are a few small cap stocks that can make money for investors:

Sasken Technologies

This is one stock that looks undervalued at the current levels of Rs 401. Sasken Technologies provides services and solutions in 3G wireless and broadband DSL technologies, Internet gateways, signal processing, and IC design. For the quarter ending March 31, 2017, the company reported an EPS of Rs 9.98. If you assume that the company does an EPS of Rs 40 in the next year, the stock is quoting at a p/e of just 10 times, which makes it very attractive at the current levels.

Check stock quote of Sasken here

Not a bad small cap stock to buy at highly undervalued levels.


RSMW is a spinning and weaving mills company, formerly called Rajasthan Spinning and Weaving Mills.

This stock has a small equity of Rs 23 crores only. It declares a huge dividend of Rs 12.5 per share, which takes the dividend yield itself to 2.25%.

The company can report a full year EPS of Rs 65, which leaves the p/e at just around 7 times at the current price of Rs 450. Not a bad bet at the current levels. You also get a dividend if you buy the stock now.

Check stock quote of RSMW here

Talwalkars True Vaue

This is another stock that has the potential to rally and make money for investors in the coming years. Talwalkars True Value operates and runs Gyms under the popular Talwalkar brand. It has plans to add many more gyms in the coming years. The company may end the year 2016-17 with an EPS of Rs 15. For a company that is more into the retail segment and is one of the top players in the business the stock should get a discounting of at least 25 times. This should take the stock to at least Rs 375 from the current market price of Rs 269. 

Check stock quote here

J Kumar Infraprojects

This is one of the cheaper infrastructure stocks at the moment. The stock has seen some selling pressure in the last few weeks on account of execution worries.

However, the company has a good track record. For the quarter ended Dec 31, 2016, J K Kumar Infraprojects  reported an EPS of Rs 3.5.

It can easily report an EPS of Rs 16, which makes the stock inexpensive at a price of Rs 288. In fact, the p/e at the moment is less than 20 times. 

If you buy the stock now, you also get a dividend of Rs 2 per share. The stock is trading at a price to book of just over 1. Check stock quote of J Kumar here


VRL Logistics

VRL Logistics had seen a sharp fall in its share price after the promoters wanted to venture into aviation. However, they have decided against the same.

VRL is a good play on the logistics business and a big beneficiaries of GST. It has planned to expand its fleet for logistics delivery.

The stock is currently trading at Rs 326 and has fallen from levels of Rs 476. In fact, VRL Logistics is trading at a 1 year forward p/e of 18 times, which is not bad considering the huge potential for growth and benefits from GST implementation. The promoters wanted to venture into airlines, but have scrapped that venture.

Check stock quote of VRL Logistics here


Sanghi Movers

Sanghi Movers is the largest crane rental company in the country and the sixth largest in the world. The stock is another excellent play on India's booming infrastructure sector.

The stock is quoting at a p/e of just 8 times 1 year forward earnings. The price to book at around 1.5 times, makes the stock a good long term bet.

Apart from valuation, we see the huge spends on roads and infrastructure driving the profitability if Sanghi Movers.

The shares ended at Rs 262 on the NSE.

Also read: Best largecap stocks to buy


J B Chemicals

J B Chemicals is an established and old pharma company. It is a major player in the Gastro, Cardiac and Pain management areas. It has a Femident division focusing on Dental and Gynaec segments.

The company has been aggressively marketing its products and constantly innovating. We believe that the company has immense growth potential in the future. The stock closed at Rs 321 on the NSE. If you want to buy JB Chemicals it is one of the better small cap companies, though there has been some changes in the last few days.

Also read: Best midcap stocks to buy




The article is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author  do not accept culpability for losses and/or damages arising based on information in this article.

Read more about: small cap
Please Wait while comments are loading...
Company Search
Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'