4 Smallcap Institutional Favourite Stocks to Watch for Future Multibagger Potential: Craftsman Automation, Aarti Industries, Paras Defence and Titagarh Rail
- October 26, 2026
- Posted by: Manan Bisht
- Category: Best Stocks
Craftsman Automation Rs 10,488. Aarti Industries Rs 427.55. Paras Defence Rs 1,177.20. Titagarh Rail Rs 663.35. Market caps from Rs 8,926 crore to Rs 27,423 crore. Data as of 23 Oct 2026.
Quick Answer
Craftsman Automation, Aarti Industries, Paras Defence and Titagarh Rail are the 4 picks in this institutional favourite stocks watchlist, with market caps between Rs 8,926 crore and Rs 27,423 crore. Craftsman Automation stands out for the biggest five-year price gain at 332.22%, while Aarti Industries offers the strongest latest-quarter profit growth at 260.47%. PE ratios run from 33.42 to 100.24, so compare each one with its industry PE before investing. All figures are as of 23 October 2026.
Institutional favourite stocks to watch for multibagger potential start with a simple filter: size, a clean financial record and earnings that keep growing. Craftsman Automation, Aarti Industries, Paras Defence and Titagarh Rail meet that test, with market caps from Rs 8,926 crore to Rs 27,423 crore and Craftsman Automation offering the biggest five-year price gain at 332.22%. Each of these companies has a market capitalisation below Rs 30,000 crore and a rise of at least 0.5 percentage point in both foreign and domestic institutional holding over the past year, and net profit rose in FY26 and in the latest quarter.
This list covers companies with a market capitalisation below Rs 30,000 crore and a rise of at least 0.5 percentage point in both foreign and domestic institutional holding over the past year, rising profit in FY26 and the latest quarter, and complete, verifiable financials, ranked by market capitalisation. Each company has a market cap below Rs 30,000 crore. Investors screening institutional favourite stocks usually begin with size and balance sheet strength, and this list follows the same logic. All figures are as of 23 October 2026 and are drawn from NSE and BSE data and company filings.
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What Are Institutional Favourite Stocks and Why Do They Attract Multibagger Interest?
Institutional favourite stocks are shares of smaller companies where both foreign and domestic institutions have raised their stakes over the past year, a rare sign of agreement among large investors. The four here cover auto components, specialty chemicals, defence electronics and railway wagons.
When foreign and domestic funds both add to a stock, it signals broad confidence in the business. For institutional favourite stocks, both FY26 and the latest quarter showed growth. Investors researching institutional favourite stocks get a fuller picture by reading growth and valuation together. The table below lines up institutional favourite stocks on size, growth and valuation, using complete FY26 and latest quarter numbers. Past performance does not guarantee future returns, so use institutional favourite stocks as a starting point for your own research.
Institutional Favourite Stocks at a Glance: Price, Market Cap, PE and ROE
Prices are closing prices as of 23 October 2026. Aarti Industries has the lowest PE of the group at 33.42, while Paras Defence posts the highest return on equity at 12.14%.
| Stock | CMP (Rs) | Market Cap (Rs Cr) | PE | Industry PE | ROE | Debt to Equity | 52-Week Range (Rs) |
|---|---|---|---|---|---|---|---|
| Craftsman Automation | 10,488 | 27,423 | 58.98 | 37.22 | 11.76% | 1.11 | 6,324.00 to 11,999.00 |
| Aarti Industries | 427.55 | 17,744 | 33.42 | 36.42 | 7.04% | 0.83 | 338.05 to 551.75 |
| Paras Defence and Space Technologies | 1,177.20 | 9,613 | 100.24 | 48.70 | 12.14% | 0.04 | 580.50 to 1,585.00 |
| Titagarh Rail Systems | 663.35 | 8,926 | 47.37 | 45.85 | 6.51% | 0.25 | 663.35 to 1,104.30 |
Craftsman Automation: 23.87% Profit CAGR Since FY22
Craftsman Automation makes powertrain and engineering components, aluminium products and industrial machines. It reported FY26 revenue of Rs 8,130.63 crore, up 42.25% year on year, and net profit of Rs 383.99 crore, up 91.16%. Net profit has compounded at 23.87% a year since FY22, while revenue has grown 38.27% a year. Operating margin was 15.95% in FY26.
In the June 2026 quarter, revenue rose 37.21% to Rs 2,454.66 crore and net profit grew 116.31% to Rs 150.55 crore. The share price has gained 332.22% over five years and 70.31% over the past year. Domestic institutions raised their holding from 22.67% in June 2025 to 32.90% in June 2026. The stock trades at a PE of 58.98 against an industry PE of 37.22.
Aarti Industries: Quarterly Profit Up 260.47%
Aarti Industries makes benzene-based specialty chemicals and pharma intermediates for global customers. It reported FY26 revenue of Rs 8,290.97 crore, up 13.78% year on year, and net profit of Rs 419.18 crore, up 26.67%. Revenue has compounded at 8.03% a year since FY22. Operating margin was 13.07% in FY26.
The stock trades at a PE of 33.42 against an industry PE of 36.42, below the sector average. In the June 2026 quarter, revenue rose 40.57% to Rs 2,630 crore and net profit grew 260.47% to Rs 155 crore. The share price is up 31.72% over the past year. Domestic institutions raised their holding from 20.38% in June 2025 to 21.11% in June 2026.
Paras Defence: 34.81% Profit CAGR Since FY22
Paras Defence and Space Technologies makes defence optics, electromagnetic protection systems and space optics, and has a growing drone and anti-drone portfolio. It reported FY26 revenue of Rs 492.56 crore, up 32.20% year on year, and net profit of Rs 89.45 crore, up 45.47%. Net profit has compounded at 34.81% a year since FY22, while revenue has grown 27.65% a year. Operating margin was 29.65% in FY26. The debt-to-equity ratio is 0.04, which keeps interest costs low.
In the June 2026 quarter, revenue rose 35.87% to Rs 129.85 crore and net profit grew 45.34% to Rs 20.74 crore. The share price has gained 235.84% over five years and 79.10% over the past year. Domestic institutions raised their holding from 1.47% in September 2025 to 4.63% in September 2026. The stock trades at a PE of 100.24 against an industry PE of 48.70, with a return on equity of 12.14%.
Titagarh Rail: Quarterly Profit Up 69.94%
Titagarh Rail Systems makes freight wagons, metro and passenger rail coaches and other rail equipment. It reported FY26 revenue of Rs 3,234.26 crore and net profit of Rs 121.55 crore, up 40.12%. Net profit has compounded at 11.80% a year since FY22, while revenue has grown 21.48% a year. Operating margin was 11.89% in FY26. The debt-to-equity ratio is 0.25.
The stock trades at a PE of 47.37 against an industry PE of 45.85. In the June 2026 quarter, revenue rose 11.69% to Rs 771.71 crore and net profit grew 69.94% to Rs 52.58 crore. The share price has gained 185.12% over five years. Domestic institutions raised their holding from 12.78% in September 2025 to 15.95% in September 2026.
Institutional Favourite Stocks: Financial Comparison on Growth and Margins
The table compares scale and growth across these institutional favourite stocks. Latest quarter means the most recent reported quarter for each company, and only metrics that are positive for every company are shown.
| Stock | Revenue (Rs Cr) | Net Profit (Rs Cr) | 4-Year Revenue CAGR | Latest Quarter Revenue Growth | Net Profit Growth (YoY) | Operating Margin (Latest Quarter) |
|---|---|---|---|---|---|---|
| Craftsman Automation | 8,130.63 | 383.99 | 38.27% | 37.21% | 91.16% | 16.76% |
| Aarti Industries | 8,290.97 | 419.18 | 8.03% | 40.57% | 26.67% | 14.73% |
| Paras Defence | 492.56 | 89.45 | 27.65% | 35.87% | 45.47% | 26.46% |
| Titagarh Rail | 3,234.26 | 121.55 | 21.48% | 11.69% | 40.12% | 13.19% |
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Institutional Holding in Craftsman Automation, Aarti Industries, Paras Defence and Titagarh Rail
Institutional holding shows who is backing these institutional favourite stocks alongside the promoter. The table uses the latest reported quarter for each. Craftsman Automation has the deepest institutional backing, with FII and DII together holding 50.18% as of June 2026. Domestic institutions increased their holding over the past year in Craftsman Automation (from 22.67% to 32.90%), Aarti Industries (from 20.38% to 21.11%), Paras Defence (from 1.47% to 4.63%) and Titagarh Rail (from 12.78% to 15.95%).
| Stock | Promoter | FII | DII | Public | Quarter |
|---|---|---|---|---|---|
| Craftsman Automation | 42.41% | 17.28% | 32.90% | 7.41% | June 2026 |
| Aarti Industries | 41.82% | 6.99% | 21.11% | 30.07% | June 2026 |
| Paras Defence | 53.20% | 7.48% | 4.63% | 34.70% | September 2026 |
| Titagarh Rail | 40.46% | 11.38% | 15.95% | 32.21% | September 2026 |
Risks to Weigh in Institutional Favourite Stocks
Being careful with institutional favourite stocks means looking at what can slow the story as well as what can speed it up. Four points matter most:
- Past growth may not repeat.
- Share prices can move sharply in either direction.
- Valuation: Paras Defence trades at a PE of 100.24 against an industry PE of 48.70, so earnings need to keep growing to support the price.
- Concentration: Holding all 4 names puts the allocation in one sector, so size each position to match your risk appetite.
How to Choose Between Institutional Favourite Stocks
Picking from institutional favourite stocks comes down to four checks, applied in order.
- Check balance sheet strength first, and prefer a debt-to-equity ratio below 1 for non-financial companies.
- Compare each PE with the industry PE (36.42 to 48.70) and ask whether the growth rate justifies any gap.
- Track net profit growth, the operating margin and the return on equity in every quarterly result.
- Stagger entries across quarters and review institutional holding every reporting season.
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Conclusion
Among institutional favourite stocks, Craftsman Automation stands out for the biggest five-year price gain at 332.22%, Aarti Industries for the strongest latest-quarter profit growth at 260.47%, Paras Defence for the fastest profit growth, 34.81% a year since FY22 and Titagarh Rail for 11.69% revenue growth in the June 2026 quarter. Which one suits a portfolio depends on how much valuation risk it can carry, so staggering entries and reviewing each quarterly result is a sound habit. Investors comparing institutional favourite stocks should rank them on growth, financial strength and the price paid, and anyone who wants personalised guidance can consult a SEBI-registered advisor before acting.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data with the official NSE (nseindia.com) and BSE (bseindia.com) websites before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
Frequently Asked Questions on Institutional Favourite Stocks to Watch
Which are the best institutional favourite stocks to watch for multibagger potential?
Ans. Craftsman Automation, Aarti Industries, Paras Defence and Titagarh Rail are the 4 names this list highlights, with market caps of Rs 27,423 crore, Rs 17,744 crore, Rs 9,613 crore and Rs 8,926 crore respectively. Craftsman Automation is notable for the biggest five-year price gain at 332.22%. Aarti Industries stands out for the strongest latest-quarter profit growth at 260.47%. Paras Defence offers the fastest profit growth, 34.81% a year since FY22. Titagarh Rail brings 11.69% revenue growth in the June 2026 quarter. These are watchlist names for institutional favourite stocks, not recommendations, so match each one to your own risk profile and time horizon.
Is Paras Defence a good stock for long-term investors?
Ans. Paras Defence has a return on equity of 12.14%, a PE of 100.24 against an industry PE of 48.70 and a market cap of Rs 9,613 crore. Net profit has compounded at 34.81% a year since FY22, and FY26 revenue rose 32.20% while June 2026 quarter net profit grew 45.34%. Long-term returns in institutional favourite stocks depend on earnings growth and the price paid at entry, so staggering purchases and consulting a SEBI-registered advisor is sensible.
Can Craftsman Automation become a multibagger from here?
Ans. Craftsman Automation has already gained 332.22% in five years, so another multi-fold move would need sustained earnings growth. A multibagger outcome in institutional favourite stocks requires earnings to keep growing faster than the market for several years. Net profit has compounded at 23.87% a year since FY22, and FY26 revenue rose 42.25%. At a PE of 58.98 against an industry PE of 37.22, valuation should be checked against that growth before investing.
What is the market cap of Craftsman Automation, Aarti Industries, Paras Defence and Titagarh Rail?
Ans. As of 23 October 2026, Craftsman Automation has a market cap of Rs 27,423 crore, Aarti Industries has a market cap of Rs 17,744 crore, Paras Defence has a market cap of Rs 9,613 crore and Titagarh Rail has a market cap of Rs 8,926 crore. All of them qualify as smallcaps. Market cap changes daily with the share price, so check the latest figure on the Univest Screener or on NSE before taking a decision on institutional favourite stocks.
What are the risks of investing in institutional favourite stocks?
Ans. The main risks are market swings, slower growth than expected and valuations that already reflect good news. Companies with strong balance sheets and steady earnings handle these better. Paras Defence trades at a PE of 100.24 against an industry PE of 48.70, so earnings growth needs to hold up.
Why is Paras Defence trading at a PE of 100.24?
Ans. Paras Defence’s PE of 100.24 compares with an industry PE of 48.70. The market is paying a premium for profit growth of 34.81% a year since FY22, latest-quarter profit growth of 45.34% and FY26 revenue growth of 32.20%, which also means the stock is more sensitive if growth slows. Investors in institutional favourite stocks who are comfortable with higher valuation risk may prefer to stagger purchases instead of investing in one go.
How much do institutions hold in Craftsman Automation, Aarti Industries, Paras Defence and Titagarh Rail?
Ans. As of the latest reported quarter, FII and DII together hold 50.18% of Craftsman Automation (17.28% and 32.90%), 28.10% of Aarti Industries (6.99% and 21.11%), 12.11% of Paras Defence (7.48% and 4.63%) and 27.33% of Titagarh Rail (11.38% and 15.95%). Rising institutional holding is a useful signal in institutional favourite stocks, though it should be read with earnings trends rather than on its own.
