Motilal Oswal’s buy-sell-hold call: Bata, VA Tech Wabag…6 midcap & smallcap stocks to watch

While headline indices grabbed attention, a different story played out in the midcap and smallcap space. Water infrastructure firms landed mega Middle East orders, footwear brands fought margin battles, and a travel platform took a hit from war and pricey airfares. Here are six stocks Motilal Oswal just rated after Q1; five Buys, one Sell, and one Neutral.

VA Tech Wabag posted a strong quarter, with revenue up 21% and profit up 37% year-on-year. The real story is the order book, now at roughly Rs 194 billion, nearly five times last year's revenue, after the company forayed into Kuwait and the UAE with fresh wins. Middle East projects kept running smoothly despite regional tensions, and management is targeting 15-20% revenue growth for the next three to four years.

Motilal Oswal reiterates Buy with a target of Rs 2,529, a 34% upside.

Relaxo's turnaround continued, with revenue up 8% and gross margin jumping nearly 5 percentage points as average selling prices rose. But volumes actually declined, and most of the margin gain got eaten up by higher operating costs. The company is racing to open new stores, targeting roughly 500 outlets by year-end. The catch: at around 45 times forward earnings, the stock already prices in a lot of optimism.

Motilal Oswal keeps a Sell rating with a target of Rs 290, implying 31% downside.

Bata grew revenue just 4%, but pre-tax profit jumped 23%, showing the company is squeezing more margin out of every sale through better inventory and fewer markdowns. A redesigned product lineup is now hitting stores, with a bigger rollout planned over coming quarters, and franchise stores keep delivering solid same-store growth. The open question is whether new products can actually reignite topline growth, not just profitability.

Motilal Oswal stays Neutral with a target of Rs 645, a 12% downside from current levels.

Indo Count's headline number says it all: new business revenue surged 198% year-on-year, now making up nearly a third of total sales, while the core bed linen business stayed flat and even saw volumes dip due to container shortages. A flood briefly shut down the company's Bhilad manufacturing unit, which has since partially reopened. Management is targeting Rs 15 billion from the new business alone in FY27.

Motilal Oswal reiterates Buy with a target of Rs 550, a strong 41% upside.

Midwest raised prices sharply, pushing granite realizations up 32% year-on-year to offset rising diesel and logistics costs. Revenue climbed 35%, but profit missed estimates as those higher input costs bit into margins, which slipped to 25.5% from over 27% a year earlier. Management still expects margins to recover to 26-27% for the full year, with quartz production adding a further boost in FY28.

Motilal Oswal maintains Buy with a target of Rs 1,300, a 16% upside.

Yatra Online missed across the board, with profit coming in at just INR3 million against an expected INR90 million, hurt by elevated airfares and corporate travel budget cuts tied to regional conflict. Still, there's a silver lining: Yatra's air passenger volumes grew 5%, roughly double the industry rate, meaning it's still winning market share even in a tough environment. Total bookings rose 17% year-on-year.

Motilal Oswal expects a rebound from the second half of FY27 and keeps its Buy rating, with a target of Rs 135, a 16% upside.

Five Buy calls, one Sell, one Neutral. Infrastructure and home textiles are the standout growth stories this quarter, powered by record order books and fast-scaling new businesses. Footwear names are stuck between recovery and rich valuations, while travel remains a wait-and-watch story tied to how quickly fares and geopolitics normalize.