10 smallcap stocks that can rally up to 50% this 2025

5 January 2025 by wealth18.com

Domestic brokerage firms have identified promising small-cap stocks which offer opportunities for investors seeking substantial growth in their portfolios. These stocks are across sectors such as hospitality, specialty chemicals. Here are 10 small-cap stock ideas for your 2025 portfolio:

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of of Wealth18.com Please consult your financial advisor before taking any investment decision)

Ethos | CMP: Rs 2,889 | Target Price: Rs 3,750 | Upside 30% (Axis Securities)
The company’s robust and consistent performance over the last several quarters underpins Ethos’ promising future. This will be driven by – 1) Continued strong demand in the premium and luxury watch space, 2) Foray into the fast-growing CPO segment, 3) Increasing share of high-margin exclusive brands, 4) Diversification into fast-growing luxury segment – Luggage and Jewellery, and 5) Notable headroom for margin and ROCE expansion.

DOMS Industries | CMP: Rs 2,816 | Target Price: Rs 3,120 | Upside 11% (Axis Securities)
Given the above-mentioned investment thesis, we expect the company to report robust Revenue/EBITDA/PAT growth of 25%/25%/28% CAGR over FY24-27E. This positive trajectory is expected to enhance the company’s overall return profile, translating into ROCE growth from 22% in FY24 to 24% in FY27.

Axiscades Technologies | CMP: Rs 690 | Target Price: Rs 838 | Upside 21% (Nirmal Bang)
ATL has won a critical work package on aerostructures (TCV – $15m), solidifying its presence in the aerospace vertical. It plans to focus on the digital side of aerospace by broadening its presence in Europe, enabling better interaction.

The company will continue to focus on large deals in the defense space and has revamped leadership to align with its future aspirations. There is a strong order pipeline with opportunities in anti-drone systems, missile launching programs, and other defense initiatives.

Privi Speciality Chemicals | CMP: Rs 1,799 | Target Price: Rs 2,126 | Upside 18% (Nirmal Bang)
Privi’s strategic alliances with big MNC players such as Givaudan, BASF, etc., backed by its strong R&D with the ability to deliver reliable and sustainable products, has established its prominent position in the market. It ensures sustaining its leading position in key products such as Dihydromyrcenol, Amber Fleur, and Pine Oil. Galaxmusk and its variants have performed well in the initial year of operations.

It can achieve Rs. 2,200-2,500 crore of revenue at its existing capacity of 48,000 MTPA, considering current prevailing prices.

Samhi Hotels | CMP: Rs 205 | Target Price: Rs 269 | Upside 31% ((Nirmal Bang)
SHL has signed a long-term variable lease agreement in Hitec City, Hyderabad, to develop an Upper Upscale hotel with 170 – 175 rooms. Similarly, 167-room new hotels in Calcutta and Bangalore (under the Holiday Inn Express brand) have also been completed and are currently under the pre-opening stage, expected to be operational in FY25.

“We assign an EV/EBITDA multiple of 15x to FY26 EBITDA to arrive at a target of Rs 269/share,” the brokerage said.

Senco Gold | CMP: Rs 1,147 | Target Price: Rs 1,550 | Upside 35% (Religare Broking)
Senco Gold is expanding its presence in the lab-grown diamond jewelry market through its sub-brand, Sennes. This brand targets the “aspirational upper middle class,” offering luxury lifestyle products including jewelry, leather bags, and lab-grown diamonds. They plan to have 8-10 Sennes stores by the end of FY25.

Dee Development Engineers | CMP: Rs 312 | Target Price: Rs 450 | Upside 44% (Sharekhan)
The company has a healthy order book position that is diversified across key sectors and geographies. We expect the company to register a revenue/net profit CAGR of 21%/92% over FY2024-FY2027.

DEE has recently received a repeat export order of ~Rs. 140 crore from an existing client. The order win has led to the highest-ever order book of Rs. 1,400 crore. Management expects an additional order inflow of Rs. 700 crore in the coming quarters of FY2025.

ISGEC Heavy Engineering | CMP: Rs 1,489 | Target Price: Rs 1,885 | Upside 27% (Sharekhan)
The company’s strategy is to focus on low-duration projects and forego higher-duration ones. These projects will have a lesser component of civil work and will involve more of the technical engineering part, which would help increase the company’s margins.

Management had guided for double-digit revenue growth for FY2025, aided by macro tailwinds and a good order book pipeline.

Wonderla Holidays | CMP: Rs 764 | Target Price: Rs 991 | Upside 30% (Sharekhan)
WHL plans to incur a capex of Rs. 1,500-2,000 crore for adding 3-5 parks over the next five years (in states such as Punjab, Uttar Pradesh, Gujarat, and Madhya Pradesh), with Rs. 540 crore to be funded through QIP and the remaining from debt and internal accruals.

Attractive valuations of 22x/16x its FY2025E/FY2026E EV/EBITDA, a sturdy balance sheet despite a huge capex, and double-digit earnings visibility make WHL a comfortable play in the discretionary space.

Kirloskar Oil Engines | CMP: Rs 1,043 | Target Price: Rs 1,600 | Upside 53% (Sharekhan)

The company is a leading player in the back-up power market and has a healthy balance sheet and a lean working capital cycle. We have built in a Revenue/PAT CAGR of 12%/19% (FY2024-FY2027E).

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