LG Electronics, APL Apollo Tubes among 7 mid & smallcap picks by Axis Securities for August

The Nifty 50 outperformed on the back of strong contributions from IT, Financials and select industrial companies. Midcap and Smallcap indices also participated in the rally but underperformed the benchmark, reflecting investors' preference for quality companies amid rich valuations. Here are 7 mid and smallcap stocks that bucked the trend, as listed by Axis Securities.

The brokerage sees 26% upside on the midcap stock, and has maintained an equal weight rating. The company is well positioned to deliver above-industry growth through its expansion projects and the acquisition of JP Cement's Central India assets. The company plans to increase cement capacity to 67mt by Q3FY28, which should support sustained volume growth, market share gains and operating leverage over the medium term. The acquired assets are expected to contribute meaningfully from Q3FY27. These expansions, coupled with a current utilisation of ~61% (offering strong operating leverage), are expected to drive growth, with the company projected to deliver ~6% volume CAGR over FY25–FY28E.

Signalling 22% upside, the brokerage has assigned an overweight rating on the midcap stock. While commodity prices and currency fluctuations remain near-term risks, LG’s strong balance sheet, Rs 4,476 crore cash position and expanding manufacturing footprint provide healthy long-term growth visibility. The company delivered its highest-ever quarterly revenue of Rs 8,054 Cr in Q4FY26 with broad-based growth across premium and mass-premium segments. LG’s robust brand equity, wide distribution network and growing acceptance in Tier-2 and Tier-3 cities position it well to outperform industry growth over the medium term.

The brokerage views the midcap stock with a 24% upside, and an overweight rating. Management highlighted war-driven global disruptions and near-term headwinds for the sector, such as a steel price increase (HRC up ~Rs 3,000/ton), which has led to channel destocking and energy/gas/labour shortages. As a result, the earlier 20% YoY volume growth guidance for FY27 was revised towards the lower end of 15-20% (at risk in the near term). On the valuation front, stock is trading at 34x its 12-month forward consensus EPS. The brokerage expects a 19% rise in revenue from operations as well as EBITDA, and a 22% jump in PAT CAGR over FY26-28E.

The brokerage views the smallcap stock with a 20% upside, and an equal weight rating. The lender has commenced FY27 on a strong footing, with robust performance across key parameters reinforcing confidence in its ability to sustain strong profitable growth. The brokerage continues to view it as the best play on the MFI recovery cycle, with stabilising collections, lower slippages and credit costs trending lower. Despite an accelerating shift towards secured lending, incremental focus on higher-yielding secured products along with efforts to strengthen the liability franchise with focus on CASA and retail deposit mobilisation should help the bank sustain its NIMs in FY27, though contraction over FY28-29E is imminent.

The brokerage views the smallcap stock with a 20% upside, and an equal weight rating. Chalet remains well positioned to benefit from India's structural hospitality upcycle, with revenue increasing 12.5% YoY and EBITDA margin expanding by 317 bps to 45.7%. Despite geopolitical disruptions and ongoing construction and renovation activities at its Powai and Vashi properties, the company delivered a resilient operational performance, with Q1FY27 hospitality revenue of Rs 178 Cr, reflecting growth of 8.5% YoY. Management remains positive on Q2FY27, supported by a strong start to the quarter and healthy booking trends for August.

Signalling 12% upside, the brokerage has assigned an overweight rating on the smallcap stock. The brokerage remains positive on Minda Corp’s growth trajectory, supported by strong order inflows, premiumization, expanding EV opportunities, and technology-led product offerings. Backed by a robust Rs 10,000 crore order book and management’s confidence in outperforming industry growth through organic and inorganic initiatives, it projects a CAGR of 18%/22%/30% in Revenue/EBITDA/Adj PAT over FY27-28E, with a higher share of profits from associates expected to further support PAT growth.

The brokerage views the smallcap stock with an 11% upside and an overweight rating. HCG is entering a highly margin-accretive phase, positioning its EBITDA margins for meaningful acceleration, driven by unlocking strong operating leverage, achieved through increased utilisation rates at existing centres and strategic new LINAC installations. This will accelerate value creation, structurally shifting the company toward higher profitability, superior capital efficiency, and sustainable long-term growth. The brokerage expects revenue, EBITDA, and PAT to grow by 10%, 19% and 231% CAGR for FY26-28E, respectively, with EBITDA margins expanding by 200 bps to 21.3% by FY28E.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)