Investec has identified 2 small-cap stocks with strong growth potential, offering an upside of up to 56 percent. Backed by solid fundamentals and positive business developments, these stocks are gaining investor interest as promising long-term opportunities.
Here are a few stocks that Investec has given an upside potential of up to 56 percent.
Yatra Online Limited
With a market capitalization of Rs. 1,550.33 crore, the shares of Yatra Online Limited were currently trading at Rs. 98.80 per equity share, down nearly 0.34 percent from its previous day’s close price of Rs. 99.14. Investec has given Yatra Online Limited a “Buy” rating, setting a target price of Rs. 155, reflecting a 56.34 percent upside.
Investec sees strong potential in Yatra Online Limited for several key reasons. The company’s corporate business now makes up 65 percent of its total bookings and is expected to grow even more. In FY25, corporate bookings rose by 38 percent year-on-year, showing strong demand.
Yatra is also focusing more on hotels, which offer better profit margins. The company has shared a positive outlook, with expected revenue growth of 20 percent and a 30 percent growth in EBITDA. Over the next few years (FY25–FY28), Yatra is also expected to grow its earnings per share by 36 percent, making it an attractive investment opportunity.
Yatra Online Limited was established in 2005 and is headquartered in Gurugram. It is a leading Indian online travel services provider. The company offers booking and information for domestic and international flights, hotels, holiday packages, buses, trains, cabs, and corporate travel solutions, serving both leisure and business travelers.
Coming into financial highlights, Yatra Online Limited’s revenue has increased from Rs. 108 crore in Q4 FY24 to Rs. 219 crore in Q4 FY25, which has grown by 102.78 percent. The net profit has also grown by 150 percent, from Rs. 6 crore in Q4 FY24 to Rs. 15 crore in Q4 FY25.
Varroc Engineering Limited
With a market capitalization of Rs. 8,356.65 crore, the shares of Varroc Engineering Limited were currently trading at Rs. 546.95 per equity share, rising nearly 0.94 percent from its previous day’s close price of Rs. 541.85. Investec has given Varroc Engineering Limited a “Buy” rating, setting a target price of Rs. 715, reflecting a 30.72 percent upside.
Investec sees strong potential in Varroc Engineering Limited for several key reasons. The company reported EBITDA for the March quarter that was 5 percent higher than expected, mainly due to better profit margins. EBITDA margins improved, helped by strong sales from new order wins worth Rs. 60.5 billion.
Going forward, the execution of these new orders is expected to boost performance. Analysts have raised the target valuation multiple from 15x to 20x, supported by the resolution of the Omnia joint venture dispute, deleveraging of the balance sheet, and a healthy order book.
Varroc Engineering Limited was established in 1988 and is headquartered in Aurangabad, India, and is a global automotive component manufacturer. The company designs, manufactures, and supplies exterior lighting, polymer, electrical, and metallic components for two-wheelers, passenger cars, and commercial vehicles worldwide.
Coming into financial highlights, Varroc Engineering Limited’s revenue has increased from Rs. 1,975 crore in Q4 FY24 to Rs. 2,099 crore in Q4 FY25, which has grown by 6.28 percent. The net profit has decreased by 60.34 percent, from Rs. 58 crore in Q4 FY24 to Rs. 23 crore in Q4 FY25.
Written By – Nikhil Naik
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