Double Booster: 5 Smallcap Stocks Seeing Rising DII + FII Holdings

In stock market investing, following the "smart money" has long been a profitable strategy. Institutional investors, like domestic institutional investors (DIIs) and foreign institutional investors (FIIs), have vast resources, proprietary research, and market-moving influence.

Their bets often signal confidence in a company's growth trajectory, as these players rarely act on whims. Their moves are calculated, data-driven, and timed to capitalize on undervalued opportunities.

When both DIIs and FIIs lap up holdings in the same stock, it's like a double seal of approval.

Of course, this isn't a guaranteed ticket to riches-markets remain unpredictable-but tracking where the pros are parking their capital offers a good starting point for uncovering hidden gems.

With that in mind, let's dive into five small-cap stocks that are quietly attracting a double booster shot of DII and FII investments-a trend that could hint at brighter days ahead.

Take a look...

#1 Restaurant Brands Asia

First on the list is Restaurant Brands Asia, formerly known as Burger King India, is a quick-service restaurant (QSR) company that operates as an exclusive master franchisee for globally recognised brands in specific geographies.

The core business of Restaurant Brands Asia is providing food and beverage services, primarily under the BURGER KING® brand in both India and Indonesia, and the POPEYES® brand exclusively in Indonesia.

Over the last quarter, the DIIs and FIIs both combined have increased their stake in the company by 6.64%.

Coming to its financial performance, the company has delivered a top-line growth of 34% compounded annual growth rate (CAGR) over a 3-year period and a net profit CAGR of 3%. The last 3-year return on equity (ROE) has been -30%.

Therefore, it is no surprise that the stock has been falling for the last 1 year.

The institutions are seeing what doesn't easily meet the eye of a retail investor: A strong subscale brand that can deliver tremendous profits after achieving critical scale.

The company has elevated operational costs due to breakneck growth in its stores. Once the newer stores mature, the costs should come down, and profits should rise.

Restaurant Brands Asia is focused on aggressive expansion, enhanced profitability, and market leadership.

For its India business, it is not slowing down on restaurant expansion, finalising agreements for the next several years until FY29 and actively approving new sites.

The company exceeded its FY24 target by reaching 455 restaurants by 31 March 2024, and planned to reach a total of 510 by 31 March 2025, a target it has achieved.

A key focus is on increasing dine-in traffic, which continues to improve and increase every month.

While demand has recently leaned towards value offerings, resulting in a lower average per check, the company is driving traffic through this value strategy.

It expects this to shift towards a mid-to-higher average per check over the next two to three quarters, potentially leading to positive same-store sales growth.

The company is trying to make its delivery business more profitable, aiming for a double-digit margin.

It expects healthy revenue growth and improvement in margins in FY26, supported by planned store additions, expected revival in consumer spending due to announced tax and rate cuts, and the focus on the value segment.

The company is also leveraging digital transformation and expanding its BK Cafe® offerings within restaurants, contributing to incremental sales and efficiency.

In Indonesia, the current environment is challenging due to geopolitical headwinds, impacting average daily sales and causing a loss of profitability at the restaurant level in a recent quarter.

The company's strategy for Indonesia involves becoming more efficient and reducing cash losses by shrinking the portfolio to approximately 147 restaurants and taking a hard look at general and administrative expenses.

Restaurant Brands Asia is currently not building new restaurants in Indonesia, as the focus is on turning around the existing business.

Despite the challenges, it considers Indonesia a turnaround story and is working hard towards this goal. It is targeting cash breakeven at a country level in FY25.

The company completed a Qualified Institutional Placement (QIP) of Rs 5 billion (bn) in March 2025, which has strengthened liquidity and will partly fund the aggressive expansion plans in India.

For more details, check out Restaurant Brands Asia's financial factsheet.

#2 Shaily Engineering Plastics

Coming second on the list is Shaily Engineering Plastics, it specialises in the manufacture and sale of customised components made up of plastic and other materials.

It is India's largest exporter of engineered plastic components and a globally respected supplier for high-precision moulded plastic products and assemblies.

Over the last quarter, the DIIs and FIIs both combined have increased their stake in the company by 4.04%.

The company's business is divided into three segments: Healthcare, Consumer, and Industrial.

The healthcare segment is the second-largest and fastest-growing. It involves contract manufacturing of medical devices and supplying proprietary medical and drug delivery injectable devices and wearable injectors to pharma companies.

The consumer segment includes home furnishings, FMCG packaging, LED lights, toys, and carbon steel furniture, serving global FMCG majors and providing complete solutions for home furnishings.

The industrial segment comprises automotive components, appliances, and high-performance engineering components. The company supplies components and casings for electrical household appliances and solutions to replace metals with high-strength plastic in the auto sector.

Coming to its financial performance, the company has delivered a top-line growth of 21% CAGR over a 3-year period and a net profit CAGR of 37%. The company has a ROE of 13%.

Looking ahead, the company management anticipates continued robust growth by adding new customers in consumer and healthcare segments and an increasing contribution from the healthcare segment to the total operating income.

For the current financial year, it has guided for revenue growth higher than the industry average. Looking at a 3-5 year perspective, the company suggests a growth range of around 13-15% on the base business.

The healthcare segment is projected to continue as a significant growth driver, with management adopting a scalable approach for faster revenue increases over the next 5 years, and the medical device business is expected to constitute about 25% of revenues over the next three years.

In the consumer segment, decent growth is expected in upcoming years through business revival, market share gains, and potential commercialization of new products from two global retail chains within 8 to 10 months, albeit starting small.

The Industrial segment is anticipated to see growth return at a steady pace after a Q3 FY25 degrowth, with automotive product development contributing higher revenue due to enhanced carbon steel competence.

In terms of order book, new business has been secured across segments, including two new global retail chain customers for Q1/Q2 FY26 supplies in the consumer segment, a new marquee industrial customer, and new products from a marquee FMCG customer.

Notably, in the healthcare segment, it has signed six contracts for Pen Injectors for GLP-1 and other therapies with various customers in Q3 FY25, with three being for Semaglutide.

For more details, check out Shaily Engineering Plastics' financial factsheet.

#3 Aditya Vision

On number three comes Aditya Vision - a multi-brand consumer electronics retail chain, headquartered in Patna, India.

Aditya Vision is dedicated to catering to the people of the Hindi heartland of India with exceptional consumer electronics, offering top-notch products at a reasonable price.

The company sells a wide range of electronic items, including air conditioners, televisions, refrigerators, washing machines, mobile phones, laptops, cameras, microwaves, chimneys, home theatres, and soundbars.

It offers over 10,000+ Stock Keeping Units (SKUs) from more than 100 consumer durable and electronic brands.

Over the last quarter, the DIIs and FIIs both combined have increased their stake in the company by 4.03%.

Coming to its financial performance, the company has delivered a top-line growth of 33% CAGR over a 3-year period and a net profit CAGR of 57%. The last 3-year return on equity (ROE) has been 37%.

Looking ahead, Aditya Vision's management has guided for a revenue CAGR of 20-25% over the next 3-5 years and believes they can achieve growth rates of 30-35%.

This top-line expansion is expected to be supported by double-digit same-store sales growth (SSSG), building on the 15% SSSG reported for the first nine months of FY25 and 13% for Q3 FY25.

It's optimistic about a demand turnaround, particularly in their operating region, with expectations for growth picking up in the coming months.

Despite a temporary contraction in gross margins in Q3 FY25 attributed to sluggish demand, management expects to maintain gross margins in future quarters and projects stable gross margins year-over-year starting from Q4 FY25.

The expected sustainable EBITDA margin is between 8% and 10%. Profitability is anticipated to grow in line with revenue, targeting around 20-25% growth on profitability.

A significant part of the future strategy is aggressive store expansion. Aditya Vision aims to open a minimum of 25 new stores annually over the next two to three years, with a target of reaching 200 stores in FY26.

The primary focus for expansion is Uttar Pradesh though they will also open new stores in high-response districts in Bihar.

For more information, check out Aditya Vision's financial factsheet.

#4 GMM Pfaudler

Fourth on the list is GMM Pfaudler, formerly Gujarat Machinery Manufacturers, is a company with a leadership position globally in engineering equipment and systems, particularly known for its glass lined equipment (GLE).

The company holds over 40% market share in the global GLE segment and over 50% in the domestic Indian market.

While GLE has historically been a major part of its business, the company has significantly diversified its operations into non-GLE segments, including Mixing, Filtration and Drying, Heavy Engineering, Engineered Systems, and Services.

The services segment, which includes activities like repair and refurbishment, contributes a significant portion of revenue, particularly internationally, and the company is focused on growing this area in India as well.

Over the last quarter, the DIIs and FIIs both combined have increased their stake in the company by 2.05%.

Coming to its financial performance, the company has delivered a top-line growth of 51% CAGR over a 3-year period and a net profit CAGR of 29%. The last 3-year ROE has been 20%.

Looking ahead, despite a somewhat muted performance in the first half of FY25, GMM Pfaudler's management anticipate that the second half of FY25 will be stronger in terms of both revenue and margins.

This is bolstered by a robust order backlog that stood at Rs 17.4 bn as of Q3 FY25, a 7% increase from the end of December 2023.

The order intake for the nine months of FY25 showed a healthy 13% increase compared to the same period in FY24, and the opportunity pipeline remains stable globally.

The higher-margin services business is a priority for growth, particularly in India. A core part of the company's growth strategy is the diversification into non-glass lined businesses, which have seen significant order intake growth and are offsetting the cyclical slowdown in the traditional glass-lined segment.

For more information, check out GMM Pfaudler's financial factsheet.

#5 The Anup Engineering

Fifth on the list is The Anup Engineering.

It is primarily engaged in the business of manufacturing and fabrication of process equipment required for various industries.

The company offers an extensive range of products, including Heat Exchangers, Reactors & Separators, Pressure Vessels & Drums, Columns & Towers, Industrial Centrifuges, Silos, and Piping spools and Custom Fabrication.

Over the last quarter, the DIIs and FIIs both combined have increased their stake in the company by 1.61%.

Coming to its financial performance, the company has delivered a top-line growth of 25% CAGR over a 3-year period and a net profit CAGR of 23%. The last 3-year ROE has been 17%.

Looking ahead, for the next two to three years, the company aims to grow at a rate of 25-30% YoY. For FY25, the company gave a growth guidance of 30% with an EBITDA margin of around 22%.

It's looking to achieve a turnover of around Rs 100 bn in FY26. This is expected to be supported by contributions from their facilities, with the Ahmedabad facility projected to bring in Rs 6 bn, the Kheda facility Rs 3 bn (benefiting from two quarters of the new additional bay), and the Mabel Engineers subsidiary chipping in Rs 1 bn.

The company expects to open FY26 with a pending order book close to Rs 9 bn that is executable in that year. The average inquiry pipeline remains healthy, hovering around Rs 9 to 10 bn, largely fuelled by exports.

The future plans include the construction of Phase 2A at the Kheda facility, which will add two bays and is expected to be commissioned in October 2025.

The company is also focusing on consolidating its current product portfolio while diversifying into futuristic products. The management is actively looking for collaborations or design tie-ups with established players, specifically for new products and not for capacity additions in the existing portfolio.

For more information, check out The Anup Engineering's financial factsheet.

Conclusion

The surge in DII and FII holdings in these smallcaps reflects a broader institutional bet on niche sectors poised to benefit from India's evolving economic landscape-be it consumer demand, healthcare innovation, or industrial expansion.

Yet, beneath the optimism lie nuanced risks. Restaurant Brands Asia's aggressive scaling in India could face margin pressures if inflation persists, while its Indonesian turnaround remains a high-stakes gamble.

Shaily Engineering Plastics, though riding the global healthcare wave, must navigate supply chain vulnerabilities and regulatory hurdles in medical device exports.

Aditya Vision's regional dominance is impressive, but its reliance on discretionary spending in tier-2/3 cities exposes it to rural demand cycles and competition from e-commerce giants.

For GMM Pfaudler and The Anup Engineering, diversification and export reliance are double-edged swords. Global slowdowns or trade barriers could dent order pipelines, while capex-heavy expansions risk margin erosion if execution falters.

Therefore, it's important to conduct thorough research on financials and corporate governance before making investment decisions, ensuring they align with your financial goals and risk tolerance.

Happy investing.

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