5 Beaten Down Smallcap Stocks that Could Make a Comeback in 2026

Small-cap stocks have experienced a significant decline over the past six months. The Nifty Smallcap 100 index, has dropped about 9% during this period. From 19,007 points on 9 July 2025, the index now stands at 17,282 points as on 9 January 2026.

What's particularly striking is the extent of the losses observed across various sectors such as chemicals, renewable energy, construction, real estate, and hospitality.

However, there are cases where a potential rebound might be on the horizon, especially in companies where expansion plans are clear and margins are sustained.

Here, we examine five such candidates.

This editorial focuses on their strong growth strategies and future plans, which may support a recovery. This is not a stock recommendation. The selected companies are those that have seen a significant drop from their 52-week highs and have a market cap of Rs 50 bn or less.

#1 Bondada Engineering

First on our list is the stock of Bondada Engineering.

The company provides end-to-end engineering, procurement, and construction (EPC) and operations and maintenance (O&M) solutions across telecom, renewable energy, and Indian Railways.

Source: BSE

The stock of Bondada Engineering is down almost 46% from 52-week highs.

On the financial front, the company has grown rapidly. The compounded average three-year sales growth has been a solid 67.5%, while the compounded profit growth has been 125%. The return ratios are also healthy with the ROCE at 38.2% and ROE at 25.8% for three years.

In H1 FY26 Bondada Engineering reported revenues of Rs 12,166 m, surging 153% YoY. The net profits too kept pace jumping 150% at Rs 925.6 m.

In an earnings conference call in November 2025, the company revealed an order book close to Rs 60 bn. Out of this, the renewable energy segment comprised Rs 45.73 bn.

In the telecom segment, Bondada Engineering had orders close to Rs 10 bn, while from the Indian railways it was placed at Rs 2,280 m.

Post the earnings conference call, the company has received more orders. In early January 2026, the company received an order from the transmission corporation of Andhra Pradesh for Battery Energy Storage System. The contract has been valued at Rs 6,270 m.

The company also received an order in early Jan 2026 from NLC India Renewables for BOS Works towards setting up of 810 mw solar projects in RVUNL at Bikaner. The size of the order is Rs 9,450 m.

In terms of expansions, in the renewable energy space, the company is present in solar EPC and is also likely to start solar IPP soon. Bondada Engineering recently received a 2 GW WO for IPP project from the Andhra Pradesh government.

The company is also exploring data centres and defence and aerospace segments for which a business plan is being chalked out. Among these plans are acquisition of established defence ancillary start-ups in strategic areas for inorganic growth. The management has highlighted plans to become US$ 1 bn company by 2030.

Recent large orders and ambitious revenue targets position the company for expansion amid rising demand for solar EPC projects.

In the past five trading sessions, Bondada Engineering saw shares move sharply lower from Rs 370 to Rs 340.8.

The stock touched its 52-week high of Rs 634.75 on 21 January 2025 and a 52-week low of Rs 330 on 4 March 2025. The stock now trades very close to its 52-week lows.

To know more check the Bondada Engineering fact sheet.

#2 Samhi Hotels

Next on our list is the stock of Samhi Hotels.

Samhi Hotels is a leading hotel ownership and asset management company in India, focused on institutional-grade hospitality assets.

With a portfolio of 31 operating hotels and 4,862 keys across 13 cities, the company partners with the world's reputed hotel operators, Marriott, IHG, and Hyatt.

Samhi Hotels was backed by institutional investors including Equity International led by Sam Zell, GTI Capital, and International Finance Corporation.

Source: BSE

The Samhi Hotels stock is down 24% from 52-week highs.

On the financial front, the company has reported a turnaround in FY25. Thereafter, the company has sustained net profits in the last few quarters.

In Q2 FY26 revenues of the company were placed at Rs 2,930 m vs Rs 2,621 m YoY. The net profits of the company surged 626% from Rs 141 m to Rs 1024 m.

The balance sheet of the company is in its strongest position since listing. Net debt to EBITDA has reduced to 2.9. Its credit rating has recently been upgraded to A+ with a stable outlook.

Moving forward, the company has announced a few projects. Samhi Hotels will be developing a dual-branded hotel development in Navi Mumbai, under the Westin and Fairfield brands by Marriott to be located near the upcoming Navi Mumbai International Airport.

The phase 1 of this hotel project will comprise around 400 rooms with a potential to expand to 700 rooms, making it the company's largest hotel by room count.

The company during the Q2FY26 quarter signed a 260-room mid-scale hotel under a long term variable lease in Hyderabad. This is the third property in the precinct alongside the Sheraton and the Fairfield by Marriott.

Samhi's W Hyderabad in HITEC City, a 170-room luxury development under W Hotel brand is progressing as planned. The company is targeting a December 2026 opening, which will be an addition to its portfolio.

The company's entry into Mumbai, expansion in Hyderabad and progress at W Hyderabad and Westin Tribute Bangalore Whitefield reinforce its strategy of building scale across India's most dynamic office markets.

In the past five trading sessions, Samhi Hotels saw shares move higher from Rs 187 to Rs 194.75.

The stock touched its 52-week high of Rs 254.6 on 22 July 2025 and a 52-week low of Rs 120.35 on 7 April 2025.

To know more check the Samhi Hotels fact sheet and latest quarterly results.

#3 Danish Power

Next on our list is the stock of Danish Power.

Danish Power is an Indian company specialising in power equipment manufacturing, particularly transformers and control relay panels.

Products of the transformer division include power transformers, distribution transformers, transformers for solar & wind power plants, inverter duty transformers and more.

The products of panel & automation division include control and relay panels, substation automation, SCADA Systems, RTU Panel and more.

Source: NSE

The stock is down 46% from its 52-week highs.

For H1 FY26, the company delivered a revenue of Rs 2,110 m against H1 FY25 figures of Rs 1,630 m, reflecting a 29% revenue growth on a YoY basis. The net profits of the company were Rs 293.1 m as against Rs 207.3 m, a 41% increase.

Moving ahead, as of early November, the company has an order book of Rs 4,050 m to be executed in the next 6 to 8 months.

In terms of transformer expansion, the company's first phase of expansion was completed in the first week of October this year, and the second phase, which is the final phase, was expected to be ready by the end of December 2025.

Once both the expansions are fully live and operational, the company expects capacities to rise close to 11,000 MVA per annum for transformers.

On the export side of business, which has been on the lower side, the company is expecting to boost the same to at least 10% of sales.

Regarding margins, the management predicts maintaining the same levels as in the previous year. For FY26, the company forecasts concluding the year with revenues between Rs 5,000-5,500 m.

A robust order book, the completion of expansion strategies, and favourable industry trends are expected to contribute positively to the company's growth.

In the past five trading sessions, Danish Power saw shares move higher from Rs 656.1 to Rs 663.

The stock touched its 52-week high of Rs 1,235 on 9 January 2025 and a 52-week low of Rs 599.95 on 9 December 2025. The stock of Danish Power is listed on the SME segment of the NSE.

To know more check the Danish Power fact sheet.

#4 KP Energy

KP Energy is a balance of plant (BOP) solutions provider in the wind energy sector, driving the transition to a sustainable future.

Balance of plant in wind energy refers to all supporting infrastructure and systems required for a wind farm's operation. The company leverages its capabilities in site planning, infrastructure execution, and grid integration.

Source: BSE

The stock is down 44% from 52-week highs.

On the financial front, KP Energy reported consolidated revenues in Q2 FY26 of Rs 3,035 m, as against Rs 2020 m YoY, thereby reporting an increase of about 50%.

The net profit for the second quarter of FY26 was Rs 359 m compared to Rs 249 m in the second quarter of the previous year, reflecting a growth of 44%.

The company's order book as of November 2025, stood at 2.2+ GW. The consolidated IPP portfolio stood at 48.5 MW, which is a combination of both wind and solar projects.

The operations and maintenance segment remains a cornerstone for KP Energy, which is enabling it to have a sustained performance with reliability across the renewable energy platforms.

The portfolio is currently 600+ MW, offering an end-to-end support, including the preventive care and diagnostics towards efficiency enhancements.

Overall, the group has an ambitious target of 10 gigawatt by 2030.

Recently, CARE Ratings has upgraded KP Energy's credit rating two notches up from BBB with a negative outlook to A- with a stable outlook.

KP Energy shows good prospects in India's renewable energy sector, driven by a good order book, growth in financials, and expanding IPP operations.

In the past five trading sessions, KP Energy saw shares move lower from Rs 354 to Rs 329.85.

The stock touched its 52-week high of Rs 583.9 on 11 June 2025 and a 52-week low of Rs 326.65 on 9 December 2025. The stock now trades very close to its 52-week low.

To know more check the KP Energy fact sheet and latest quarterly results.

#5 Jyoti Resins & Adhesives

Next on our list is the stock of Jyoti Resins and Adhesives.

The company specialises in synthetic resins and wood adhesives, particularly known for its EURO brand products like Euro 7000, a leading white glue in the retail market.

Source: BSE

The stock of Jyoti Resins and Adhesives has fallen 28% from 52-week highs.

In Q2 FY26 revenues of the company were Rs 744 m vs Rs 653 m YoY. The net profits grew marginally to Rs 172 m from Rs 163 m YoY.

Moving ahead, the company has started work on repairs and maintenance at its plant to increase the brownfield capacity by 1,500 tons per month over a period of next six months. This will take the total capacity from 2,000 tons per month to 3,500 tons per month, thereby assisting higher volumes.

The total capex expected in this brownfield expansion will be around Rs 50 m to Rs 70 m. Further the company is looking for land for its next greenfield expansion on the outskirts of the city.

Overall, the company management says that it continues to be focused on reaching Rs 5,000 m turnover mark over the next three years, led by volume growth.

The management has also guided for a long-term EBITDA margin range of 25% plus or minus 2%.

Jyoti Resins and Adhesives shows good growth potential driven by capacity expansions, geographic reach, and a focus on the growing the white glue market.

In the past five trading sessions, Jyothi Resins and Adhesives saw shares move marginally higher from Rs 1,122 to Rs 1,124.8.

The stock touched its 52-week high of Rs 1,570 on 18 July 2025 and a 52-week low of Rs 1,010.6 on 7 April 2025.

To know more check the Jyoti Resins and Adhesives fact sheet and latest quarterly results.

Should You Consider Beaten Down Smallcap Stocks?

Buying beaten-down small-cap stocks in India can offer potential for risk-tolerant investors, who focus on detailed analysis of undervalued opportunities in sectors.

However, such opportunities go hand in hand with substantial volatility and failure risks amid the segment's weak 2025 performance. Investors should exercise caution when investing in such stocks.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...