5 Stocks with Expanding Margins to Add to Your Watchlist

#2 Abbott India

The second margin expansion stock is Abbott India Ltd.

This is a leading pharmaceutical company with a product portfolio of 125 plus products. Abbott India is a part of the US-based Abbott Laboratories.

Abbott India has a presence not only in India but also serves the Sri Lankan market, Nepal, Bhutan, and even the Maldives. The company has a wide distribution network that has multiple stockists and millions of retailers.

Table for OPM & NPM

Abbott's OPM improved from 18.47% five years back to 26.4% recently, while NPM surged from 14.49% to 22.07% during the period.

In February 2026, the company partnered with Novo Nordisk India to launch Extensior^®. This is a strategic collaboration for commercializing Extensior^® for type 2 diabetic people.

Earlier in May 2026, the company launched two new products. First is TriclipTM, which is a device to repair the tricuspid valve, the first of its kind in India. Then the company also launched Ensure^® Strength Pro, which is a health drink designed for healthy aging.

The improving margins helped the company achieve a compound sales growth of 9.4% for the last five years, and a compound profit growth of 19% during the same period.

Average ROE and ROCE of the last five years stood at 30.5% and 41.4%, one of the highest in the industry.

Having said that, net sales only grew from Rs 16,046 m in Q4FY25 to Rs 17,095 m in Q4FY26. PAT increased from Rs 3,670 m to Rs 3,949 m during the period, while diluted EPS increased from Rs 172.7 to Rs 185.9.

For more details, see the ABBOTT INDIA company fact sheet and quarterly results.

#3 Karur Vysya Bank

The next stock with improving operating margins and profit margins is Karur Vysya Bank.

This private sector bank offers retail banking, treasury services, and other financial services such as demat services, MSME funds, and other financial products.

As of March 2026, the bank has a network of 901 branches, up from 838 branches back in March 2025. The bank has a major focus on the semi-urban regions, as indicated by the maximum number of branches in these regions.

Table for OPM & NPM

Coming to the margins, the bank was experiencing negative operating profit margins four to five years back, which have now significantly improved. Currently, the bank has an OPM of 7.87%, while the NPM grew from a mere 3.92% five years back to the current 20.06%.

Advances towards the agricultural sector have been one of the pivots for margin expansions for this bank. During the recent quarter, the loan book of the agriculture segment grew by a significant 19% YoY, mainly driven by Agri Jewel Loans.

Gross advances grew by 17% during Q4FY26 compared to the corresponding quarter last fiscal, while deposits grew by 13% during the period.

Coming to the long-term performance, the bank delivered a 5-year compounded sales and profit growth of 10.1% and 52.6% respectively. The 5-year average ROE was 11.8%.

During the quarter ended on March 2026, the bank generated interest earnings of Rs 29,037 m, up from Rs 25,159 m generated during the corresponding quarter of the last fiscal.

The net profit was 7,250 m, up from Rs 5,134 m a year back in Q4FY25.

For more details, see the KARUR VYSYA BANK company fact sheet and quarterly results.

#4 KPIT Technologies Ltd

The next stock with improving margins on our list is KPIT Technologies.

This is a global technology company offering software, automation solutions, and other tech-driven features for different vehicles. From feature development and integration to architecture and middleware consulting, the company does it all.

KPIT has also ventured into cloud-based connected services under which it offers digital connected solutions, intelligent cockpit, and other features and solutions.

Table for OPM & NPM

As you can see in the table above, the operating profit margin as well as the net profit margin increased steadily over the years.

From 13.33% five years back, OPM has improved to 21.05%, while NPM has grown more than 2x from 6.86% to 14.37% during the period.

In the recent quarter, Q4FY26, the management indicated the margins have improved even after significant investment into research and development and other technologies.

KPIT has been witnessing tailwinds from the powertrain or propulsion segment, especially from electric vehicles, hybrid models, and even across conventional and hydrogen pilots.

Having said that, the management is a little worried about the near-term challenges related to AI-led transformation.

During the March 2026 quarter, the company saw some strong deals, and the total contract value of the new deals during the quarter stood at around US$ 349 m.

Some of the key deals include a strategic partnership with a leading European car manufacturer who deals in powertrain, autonomous, and body electronics domains. There were other significant deals within the powertrain segment as well.

The company entered into another strategic engagement with a leading American Off-highway Original Equipment Manufacturer for middleware and autonomous solutions.

During the last five years, the company delivered a compound sales growth of 22.1% and a compound profit growth of 41.6%.

Average ROE and ROCE for these five years stood at 23.1% and 31.8%, respectively.

Coming to the Q4FY26 performance, net sales grew to Rs 17,110 m from Rs 15,283 m recorded in Q4FY25.

However, PAT declined from Rs 2,306 m to Rs 1,685 m during the period.

For more details, see the KPIT TECHNOLOGIES company fact sheet and quarterly results.

#5 TD Power Systems

The final stock on this list with improving operating and net profit margins is TD Power Systems. This company manufactures AC generators and electric motors with varied uses.

From industrial and energy applications for running gas, steam, and hydro turbines, the generators are used in locomotives, marine, solar, thermal, and customised applications.

TD Power's generators are used across the globe, with over 8,055 generators being used across 113 countries as of March 2026.

Table for OPM & NPM

This company has seen its OPM increasing from 7.3% to 18.41% in the past five years, while NPM rose from 5.83% to 13.65%.

Having said that, during Q4FY26, margins declined nominally due to shipping delays for the Turkey contract.

However, the management is expecting the margins to be steady for the near-term, especially given the excellent order inflows.

During Q4FY26, the company received new orders worth Rs 6,665 m, up by 61% YoY from orders received worth Rs 4,134 m during the corresponding quarter last fiscal. The total value of orders received during FY26 stood at Rs 22,385 m, 51% YoY up from Rs 14,783 m.

The order book as of 31 March 2026 stood at Rs 19,729 m.

Th 5-year compounded sales growth was 20% and the 5-year compounded profit growth was 42.3%.

Average ROE and ROCE for the period stood at 15.2% and 21.3%, respectively.

Coming to the Q4FY26 performance, net sales jumped to Rs 5,892 m from Rs 3,482 m, a year back in Q4FY25.

The net profit increased from Rs 530 m to Rs 722 m.

For more details, see the TD POWER company fact sheet and quarterly results.

Conclusion

When the markets are highly volatile, with a lot of uncertainties around, companies with expanding margins offer a cushion of sustainability. When margins improve steadily over the years, it helps in building confidence in investors.

The companies mentioned above have been witnessing something similar over the years when their OPM and NPM are improving steadily.

Having said that, before making any investment decision, it's crucial for investors to perform thorough due diligence of the stocks, read the financial statements in detail, and analyse the factors affecting the performance of the business.

Happy investing.

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