3 smallcaps where FIIs sharply raised stakes in Q2 FY27

In our earlier story of three microcap stocks that saw the biggest increases in FII holdings, we examined stocks where foreign investors were raising their exposure despite volatile market conditions. Extending that analysis to smallcap stocks, we look at three companies that recorded large increases in FII shareholding during the September quarter and examine the business developments that may explain the increased interest.

To identify these stocks, we screened companies with a market capitalisation of more than Rs 5,000 crore but less than Rs 20,000 crore, and an increase of at least 2 percentage points in FII holdings during the quarter. Then we zeroed in on three stocks with the largest increase in FII shareholding, based on data available as of October 16, 2026. Let’s dig in. FE Stock Insights on WhatsApPGet instant alerts on high-conviction investment themes and fundamental deep dives—direct from Financial Express.Join now #1 Skipper: FII Holding Rises To 10.31%, Order Book Hits Record Rs 9,217 Crore Skipper Ltd. operates in the power transmission and distribution infrastructure space, offering engineering products and solutions, infrastructure solutions, and polymer products as well.

The company deals in power transmission towers ranging from 11 kilovolt (kV) to 1200 kV, railway structures, testing stations, monopoles, and more, along with a wide range of PVC pipes and HDPE pipes under its polymer business segment. FIIs raised their stake by 6.2 percentage points in the July-September quarter, taking the total holding to 10.31% at the end of the quarter. Smallcap World Fund emerged as the top foreign investor during the quarter, buying a 4.83% fresh stake in the company.

Cohesion MK Best Ideas Sub-Trust comes next with a 1.31% fresh stake purchase during the quarter. Won Rs 2,102 Crore Orders Across Domestic And Export Markets Skipper Ltd. secured orders worth Rs 1,305 crore in August for the supply of transmission towers and monopoles for projects in North America, along with two 765 kV transmission line projects from a domestic developer. In September, the company won additional orders worth Rs 797 crore, including export orders for transmission towers and monopoles for projects in Australia and a domestic 765 kV transmission line project.

The company’s order book already stood at a record Rs 9,217 crore at the end of June 2026, and these new orders further added to the revenue visibility of the company. 4.5 Lakh Tonne Capacity Target Support Expansion Skipper is expanding its installed capacity to 4.5 lakh tonnes with an ongoing 75,000 tonne expansion. The current manufacturing capacity is around 3.75 lakh tonnes annually. The company has also set a longer-term target, which is to achieve 6 lakh tonnes capacity by FY29.

Revenue Rises 4.5%, While Net Profit Grows 26.5% To Rs 56.5 Crore The revenue for the April-June quarter increased 4.5% YoY to Rs 1,309.8 crore, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 10.2% to Rs 140.1 crore, with the margin expanding to 10.7% from 10.1%. Net profit grew faster than revenue to Rs 56.5 crore in Q1FY27, compared to Rs 44.7 crore a year ago, logging a 26.5% YoY growth.

Management expects revenue to grow around 15% YoY for the full fiscal year 2027 and order inflows to exceed Rs 7,000 crore, with stronger execution in the second half. Skipper's 23.52% ROCE Is In Line With Peer Median, But Debt-to-Equity Is Nearly 4 Times Higher Return on capital employed (ROCE) stood at 23.52%, at par with the peer median of 23.51%. However, Skipper's debt-to-equity ratio (D/E) of 0.63x was nearly four times the industry median of 0.16x, which makes debt levels and the company’s ability to improve capital efficiency important factors to track as it expands manufacturing capacity and executes its order book.

Is Skipper Still Undervalued? The stock is trading at a price/earnings (P/E) ratio of 28.3x, lower than the industry median of 33.9x. Its Price/earnings to growth (PEG) ratio also stands at 0.32x, significantly lower than the industry median of 0.65x, indicating the stock is relatively cheaper than its peers. 1-Year Share Price Chart of Skipper Ltd. #2 Sedemac Mechatronics: FII Holding Rises To 10.30%, Net Profit Jumps 95% Sedemac Mechatronics Ltd. is involved in the auto ancillary business, offering design and supply of electronic control units (ECUs) for vehicle and industrial original equipment manufacturers (OEMs) in India, and also caters to the US and European markets.

The company’s main focus is on control-intensive ECUs which incorporate technologies that are developed in-house. As of July 2026, the company has sold more than 13 million of such ECUs mainly to major vehicle and industrial OEMs. 03 percentage points in Q2FY27, taking their total holding to 10.30% at the end of the quarter. The Government of Singapore emerged as the top foreign investor during the period, buying a 2.32% stake, while Amansa Holdings Private Limited bought another 1.05% stake in the company.

ECU Sales Rise 53%, With 3 New Launches And A New Facility In September, Sedemac commenced commercial production at its third manufacturing facility, located in Pune. However, the entire facility is yet to be operational. Furthermore , the company expects to progressively operationalise the remaining manufacturing processes at the facility. Its control-intensive ECU sales rose to 4.2 million units over the trailing 12 months ended June 2026, from 2.75 million a year earlier, an increase of around 52.7%.

The company is also ramping up production of ECUs for two-wheelers, electric two-wheelers, and export three-wheelers. Revenue Rises 43%, Net Profit Jumps 95% To Rs 33 Crore Revenue for Q1FY27 rose 43% YoY to Rs 310 crore, from Rs 217 crore a year earlier. EBITDA increased 31% to Rs 60 crore, from Rs 46 crore in the corresponding quarter last fiscal year. However, EBITDA margin came under pressure and declined to 19.4% from 21.2% during the period.

Having said that, net profit rose 95% to Rs 33 crore from Rs 17 crore during the period, and the net profit margin also improved to 10.6% during Q1FY27 from 7.8% a year ago. The company indicated that tighter semiconductor supplies and higher raw material costs put pressure on EBITDA margins during Q1FY27, but the management expects EBITDA margins to hold or improve over the rest of fiscal year 2027.

ROCE at 35.31% Beats Peer Median, Debt-to-Equity Stays Lower Sedemac’s ROCE stood at 35.31%, relatively higher than the industry median of 16.18%, reflecting efficient use of capital compared to the peer companies. Meanwhile, the D/E ratio stood at 0.16x, lower than the peer median of 0.41x, reflecting lower financial leverage than the peer group as well. Is Sedemac’s Valuation Justified? The stock is trading at a P/E ratio of 121.96x, compared with the industry median of 29.16x.

The PEG ratio stood at 0.95x, marginally above the peer median of 0.89x, reflecting that the stock could be relatively expensive even after factoring in the growth prospects. 1-Year Share Price Chart of Sedemac Mechatronics Ltd. #3 Tourism Finance Corporation Of India: FII Holding Rises 4 Percentage Points, PAT Doubles Tourism Finance Corporation of India Ltd. (TFCI) provides financial assistance to the hospitality and tourism sector.

The company offers term loans for various purposes such as building and setting up an entire hotel, model, resort, guest houses, and other legal lodging facilities. Apart from that, the company offers term loans and special situation financing solutions for expansions, modernisation, renovation, acquisitions, takeovers, and other purposes. Apart from this, TFCI also caters to real estate, infrastructure, manufacturing, and financial services sectors as well.

FIIs raised their stake by 4 percentage points in the July-September quarter, taking their total holding to 9.46% at the end of the quarter. Maybank Securities Pte Ltd increased its stake from 1.87% to 2.68% during the quarter, while Quadrature Capital Vector Sp Limited bought a fresh 1.83% stake during the quarter, emerging as the top foreign investor in TFCI during the quarter. Gross AUM Crosses Rs 2,000 Crore, Gross NPL At 0.41% The company’s gross assets under management (AUM), including loans and project-related non-convertible debentures, stood at Rs 2,002.05 crore as of June 2026, up 17% from Rs 1,711.67 crore a year earlier.

Of which, gross loans increased 11% YoY to Rs 1,901.55 crore from Rs 1,711.67 crore a year ago. However, gross non-performing loans (NPLs) also increased to 0.41% of the loan book, up from 0.24% a year earlier, but Net NPLs remained at zero. Total Income Rises 75%, PAT Doubles To Rs 61.21 Crore The total income of TFCI rose 75% YoY to Rs 115.15 crore in the June quarter of FY27, from Rs 65.82 crore a year earlier.

Net interest income increased 34% YoY to Rs 45.96 crore from Rs 34.30 crore, while other income witnessed a significant jump to Rs 43.03 crore from Rs 9.97 crore during the period. Profit after tax (PAT) doubled to Rs 61.21 crore from Rs 30.56 crore a year earlier, while net interest margin (NIM) improved to 7.59% from 6.44% during the period. 82 crore in Q1FY27, up from Rs 890.85 crore a year earlier; however, cost of borrowing came down from 9.63% to 9.5% during the period.

Meanwhile, returns on average loans, however, grew marginally from 13.12% in Q1FY26 to 13.34% in Q1FY27. However, return on equity (ROE) stood at 9.8%, below the industry median of 14.2%. Is TFCI Already Trading At A Premium? The stock is trading at a P/E ratio of 46.8x, while the industry median is 14.9x. The price-to-book value (PBV) ratio is also higher than the industry median at 5.5x, while the industry median is 1.9x, reflecting that the stock is relatively more expensive than its peers. 1-Year Share Price Chart of Tourism Finance Corporation Of India Ltd.

Will FII Interest Sustain? So, the next few quarters will show whether these companies can sustain profit growth, execute orders on time or not, and whether they continue to expand their businesses efficiently. The rise in FII holdings also puts the focus on whether their business performance can support continued investor interest. Valuations remain another key factor, as some of these stocks trade at much higher multiples than their peers.

And to track these companies, you need to add these stocks to your watchlist. Disclaimer: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available have we used an alternate, but widely used and accepted source of information. The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation.

If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only. Maumita Mitra is a seasoned writer specializing in demystifying the world of investment for a broad audience. She has a keen eye for detail and a knack for explaining complex financial concepts in the simplest manner possible. Disclosure: The writer and her dependents do not hold the stocks discussed in this article.

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