Synopsis:
Motilal Oswal has identified some fundamentally strong small-cap stocks with significant growth potential, offering attractive upside opportunities for investors.
The brokerage has set target prices indicating potential gains of 17.89% for Kalpataru Projects International, 38.07% for Raymond Lifestyle Ltd, and 26% for VRL Logistics Ltd. These picks are backed by strong business fundamentals, robust earnings outlook, and sectoral growth prospects, making them appealing options in the small-cap segment.
1. Kalpataru Projects International Ltd
Motilal Oswal has set a target price of Rs. 1450 for this stock, indicating an upside potential of 17.89%. Kalpataru Projects (KPIL) beat revenue and profit expectations in Q1FY26, driven by strong execution in its key divisions.
The company is poised for continued growth from new T&D projects, its existing strong order book, and stable working capital. Also, slightly raised financial forecasts for FY26/27. With the stock trading at attractive valuations, the company has reiterated their BUY rating with a target price of Rs. 1,450.
Kalpataru Projects International Ltd is a leading engineering, procurement, and construction (EPC) company that operates in multiple infrastructure segments. It undertakes large-scale projects in power transmission and distribution, buildings and factories, railways, oil and gas pipelines, and urban infrastructure.
The company has a strong global presence, executing projects in over 30 countries, and is known for delivering complex infrastructure solutions with a focus on quality, safety, and timely execution.
Q1FY26 Results
Kalpataru Projects International Ltd’s YoY performance for the Q1FY26 showed significant growth. Sales increased by 35%, EBIDT by 39%, and net profit saw a remarkable jump of 154%. The Earnings Per Share (EPS) also grew by 119% compared to the same quarter in the previous year (Jun 2024).
Looking at the QoQ results, there was a slight decline from the Mar 2025 quarter. Sales decreased from Rs. 7,067 to Rs. 6,171, EBDIT from Rs. 538 to Rs. 525, and net profit from Rs. 218 to Rs. 214. The EPS also dropped from Rs. 13.20 to Rs. 12.51.
2. Raymond Lifestyle Ltd
Motilal Oswal has assigned a target price of Rs. 1425 for this stock, reflecting an upside potential of 38.07%. Raymond Lifestyle (RLL) saw a 17% YoY revenue increase in Q1, exceeding expectations.
However, EBITDA growth was weaker than projected due to high marketing costs and challenges in the garmenting business from US tariffs, causing us to lower our FY26-27 EPS estimates by 11-14%.
Management is optimistic about a margin recovery in the second half of the year, with signs of improving demand. Despite a recent stock drop, RLL’s valuation appears attractive, but a sustained recovery in growth and better execution are needed for a re-rating.
Raymond Lifestyle Ltd is a part of the Raymond Group and focuses on the branded apparel and textile segment. It offers a wide range of premium and mid-segment clothing, including formal wear, casual wear, and ethnic wear, under popular brands like Raymond, Park Avenue, ColorPlus, and Parx. The company operates through an extensive retail network across India and exports to several countries, catering to both men’s and women’s fashion needs.
Q1FY26 Results
Raymond Lifestyl’s financial results for Q1FY26 show mixed performance. On a YoY basis, the company saw positive growth with sales up 17%, EBDIT up 29%, and net profit showing a 13% improvement despite still being a loss.
However, on a QoQ basis, there was a slight decline in sales from the last quarter, while EBDIT and net profit improved significantly, with the net loss shrinking from Rs. 45.0 crore to Rs. 19.8 crore.
3. VRL Logistics Ltd
Motilal Oswal has set a target price of Rs. 710 for this stock, indicating an upside potential of 26.40%. However, the stock underwent a 1:1 bonus on 14th August. So, the adjusted target price will be Rs. 355 with an upside of 26 percent from current levels of Rs. 280.
VRL remains well-placed for long-term growth with its focus on profitable contracts, efficiency, and strong network. Despite near-term volume weakness and higher employee costs, recovery is expected from 2HFY26. Estimates for FY26 are cut by ~6–7%, but FY27 outlook stays intact. Revenue/EBITDA/PAT CAGR expected at 6%/10%/19% over FY25–27.
VRL Logistics Ltd is a leading Indian logistics and transportation company specializing in cargo and passenger transportation services. It operates a vast fleet of trucks and buses, offering road freight, parcel services, and passenger travel solutions across India.
The company caters to diverse industries by providing efficient and reliable logistics support, including goods movement, supply chain management, and express cargo delivery.
Q1FY26 Results
VRL Logistics’s financial results for the quarter ending June 2025 show strong YoY growth but a decline on a QoQ basis. Compared to the same quarter last year, sales increased by 2%, EBDIT grew by 74%, net profit surged by a remarkable 272%, and EPS saw a 271% rise. However, when compared to the previous quarter, there was a decline across all key metrics: sales, EBDIT, net profit, and EPS all decreased.
Written by Manideep Appana
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