The Indian stock market has experienced a significant correction, falling more than 10% since October 2024. Many large cap, mid cap and small cap stocks have dropped during the brutal market downturn. Some small cap stocks have declined more than 30-40% while the Indian share market fell by 10%.
Several global and domestic factors directly impact the recent fluctuations of the Indian share market. Domestic factors such as rupee weakening, poor financial performance, high market valuation and increased foreign institutional investors (FIIs) selling are causing the Indian market under pressure. Furthermore, global factors such as rising US bond yields, Trump administration in the US and other economic policies will make the market conditions even more difficult in 2025.
On the other hand, the Union Budget and earning results of the companies will be crucial in deciding the direction of the domestic market.
Despite the recent downfall of the Indian share market, there are some best small cap stocks that are trading at attractive levels. Investors looking for long-term growth stocks can find it a viable option.
In this article we will cover the best small cap stocks with strong fundamentals that could potentially give good returns in 2025. So let’s get started.
Best Small Cap Stocks 2025
Here’s the list of top 5 small cap stocks with strong fundamentals and trading at an attractive price range.
1) Eraaya Lifespaces (BOM: 531035)
Incorporated in 1967, Eraaya Lifespaces is a small cap multibagger stock that has delivered more than 687% returns in the last one year and more than 17,057% in the last 5 years. The company offers a wide range of hospitality services including real estate development, property management and digital marketing etc.
EbixCash, a Indian Subsidiary of Eraaya Lifespaces, had a Collaboration with KSRTC as the Technology solution provider for smart electronic ticketing machines (ETM). With a strong order book and strong financial performance, Eraaya Lifespaces stands out as one of the best SmallCap stocks to watch out for.
Investors looking beyond short-term volatility can find this small cap stock as a best pick as the company is virtually debt free.
2) Yatra Online (NSE: YATRA)
Yatra Online is an Indian online travel company that provides travel and hospitality services including hotel bookings, ticketing, holiday packages, airline, train and bus services etc.
The company has a strong foothold in India’s corporate travel industry. As the hotels and packages segment revenue increases, the company is strengthening its position in the Indian travel and hospitality industry.
Despite average Financial performance, Yatra Online has improved its debt to Rs 277 crore from Rs 1,742 crore. As the travel and hospitality industry is growing in India, Yatra Online is well positioned to capitalize on the market trend.
Also Read: Top Insurance Stocks in India
3) Apollo Micro Systems (NSE: APOLLO)
Incorporated in 1997, Apollo Micro Systems Ltd is a small cap private sector defence company in India. The company provides technological solutions for defence, aerospace, space and transport. Apart from that, Apollo Micro Systems is specialized in design, development, and assembly of critical electronic systems. The company has a number of well known clients in India including Indian Army, Indian Navy, DRDO, ISRO, L&T, Adani Group and Tata.
Despite the recent fluctuations in the stock price Apollo Micro Systems has delivered more than 40% in the last one month. As Indian government is focusing on strengthening its defence segment, Apollo Micro Systems can be a very good fundamentally strong pick for 2025.
4) Apollo Pipes (NSE: APOLLOPIPE)
Apollo Pipes is one of top 10 pipe companies in India that offers a variety of products including water storage tanks, solvents, cPVC pipes, uPVC pipes, HDPE pipes, PVC taps and fittings.
With a Market of Rs 1,910.15 crore Apollo Pipes is currently trading at Rs 435, up by 0.27%. The company has a ROE of 8.80% and ROCE of 12.36% respectively
5) Easy Trip Planners (NSE: EASEMYTRIP)
Incorporated in 2008, Easy Trip Planners Ltd is a leading global online travel company in India. Easy Trip offers a wide range of travel services including hotel reservation, holiday packages and ticket bookings of rail, bus and flights.
The company is debt free which is one of the good fundamentals of the company. With over 60,000 agents spread across India, Easy Trip plans to expand its services and offerings.
The company is also investing in the insurance sector through its subsidiary EaseMyTrip Insurance Broker Pvt Ltd and in technology to enhance its platforms. Investors with a long-term perspective can find this small cap stock as the best option to Invest.
Conclusion
Investing in small cap stocks can be a very good strategy for Investors looking for multibagger returns. All these above small cap stocks are trading at attractive price levels. On the other hand, investing during a market downturn can be profitable. However, buying smallcap stocks during correction is not always the best strategy as all stocks don’t recover despite strong fundamentals. Therefore, Investors should always examine fundamentals, financials and other important key metrics before Investing in SmallCap stocks.
FAQs
Which are the best strong fundamental Small cap Stocks?
Apollo Micro Systems, Eraaya Lifespaces, Yatra Online, Easy Trip Planners and Apollo Pipes are the best strong fundamental Small cap stocks.
Which SmallCap stocks will boom in 2025?
Eraaya Lifespaces, Easy Trip Planners and Apollo Micro Systems will boom in 2025
Are Small caps a good buy?
Yes, Small caps have delivered multibagger returns compared to large cap stocks however SmallCap stocks are more volatile and comes with high risk.
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