ITC Hotels to Apollo Tyres, Astral: 10 mid- and small-cap stock picks by ICICI Securities for up to 41% upside potential

Stocks to buy for long term: After a strong rally in several pockets of the market, investors are increasingly looking for fundamentally strong mid- and small-cap stocks that still offer meaningful upside. While valuations have become richer across several sectors, select companies continue to stand out due to robust earnings visibility, structural growth drivers, healthy balance sheets and sector-specific tailwinds.

Against this backdrop, ICICI Securities has released its latest 'Top Fundamental Picks of the Month', identifying 10 mid- and small-cap stocks that it believes are well-positioned to outperform over the medium term. The brokerage's list spans sectors including capital goods, healthcare, hotels, banking, auto ancillaries, building materials, real estate and retail, with expected upside ranging from 16% to 41% based on its target prices.

Here are the 10 mid- and small-cap stocks recommended by ICICI Securities:

1. Shriram Properties

Shriram Properties tops the brokerage's list in terms of upside potential. ICICI Securities has a target price of ₹125 against the current market price of ₹89, implying a potential upside of 41%. The brokerage said the residential developer has a strong unsold project portfolio worth around ₹13,429 crore across nearly 20 million sq ft, along with an additional 26 million sq ft pipeline. It also highlighted that the proposed resolution of its Kolkata land parcel could unlock value equivalent to around 72% of the company's current market capitalisation.

2. Action Construction Equipment

ICICI Securities has assigned a target price of ₹1,360 for Action Construction Equipment, compared with a CMP of ₹1,005, indicating an upside potential of 35%. The brokerage said the company is India's leading material handling and construction equipment manufacturer with leadership in mobile and tower cranes. The CMCE business contributes around 92% of revenue, while agri-equipment accounts for 8%, and the company is targeting EBITDA margins of 15-16% despite raw material inflation.

3. Astral

Astral is another high-conviction pick with a target price of ₹1,830, implying an upside of 34% from its CMP of ₹1,367. According to the brokerage, the ongoing restructuring will separate the plumbing business and chemical business into different entities. It expects Astral Chemie to achieve nearly 2.5 times revenue growth over the next four to five years, while the plumbing business continues delivering healthy double-digit growth.

4. Engineers India

ICICI Securities has set a target price of ₹315 for Engineers India versus a CMP of ₹240, suggesting an upside of 31%. The brokerage expects revenue and profit after tax CAGR of 16% and 18%, respectively, over FY26-FY28E, supported by a strong consultancy-led backlog. The company also operates across hydrocarbon consultancy and emerging sectors such as green hydrogen and biofuels.

5. ZF Commercial Vehicle Control Systems

The brokerage expects 28% upside in ZF Commercial Vehicle Control Systems, with a target price of ₹3,170 against the CMP of ₹2,482. ICICI Securities said the company commands leadership in braking solutions for the domestic medium and heavy commercial vehicle segment and stands to benefit from upcoming safety regulations, including ESC and ADAS systems, which could potentially double its content per vehicle from October 2027.

6. ITC Hotels

ICICI Securities has a target price of ₹220 on ITC Hotels, indicating an upside of 23% from the CMP of ₹179. The brokerage said nearly 15% of the company's owned room inventory is less than five years old, creating room for double-digit RevPAR growth. It also expects the company's increasing focus on an asset-light model and inorganic expansion to drive revenue and EBITDA CAGR of 13% and 17%, respectively, over FY26-FY28E.

7. Bluestone Jewellery

Bluestone Jewellery has a target price of ₹700, compared with the CMP of ₹568, translating into a potential upside of 23%. ICICI Securities highlighted that the digital-first jewellery retailer has outlined an aggressive revenue CAGR target of 50% over FY26-FY30 and expects EBITDA margins to double during the period. The brokerage believes the company's business model can support sustained growth despite near-term volatility in gold prices.

8. Narayana Hrudayalaya

ICICI Securities has assigned a target price of ₹2,310 for Narayana Hrudayalaya, implying an upside of 18% over the CMP of ₹1,962. The brokerage expects the healthcare chain's planned ₹3,000 crore capital expenditure over the next two to three years, expansion in India, ramp-up of its Cayman Islands integrated model and higher contribution from UK operations to drive revenue CAGR of around 24% over FY26-FY28E.

9. South Indian Bank

South Indian Bank features on the list with a target price of ₹52, compared with the CMP of ₹45, indicating a potential upside of 16%. ICICI Securities expects the lender's calibrated shift towards higher-yielding retail and MSME loans, along with benign credit costs and controlled operating expenses, to improve profitability. The brokerage also noted that the stock trades below its FY28 estimated book value at 0.75x.

10. Apollo Tyres

Apollo Tyres rounds off the list with a target price of ₹500, implying an upside of 16% from the CMP of ₹432. According to ICICI Securities, the tyre maker has faced pressure from rising natural rubber and crude derivative prices, but easing geopolitical tensions are expected to reduce raw material costs. The brokerage upgraded the stock to Buy, citing a healthy balance sheet and ongoing capacity expansion plans.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.