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Many small-cap stocks like Apollo Tyres, Central Bank of India, etc. have delivered over 100% returns in five years despite recent price declines.
Godfrey Phillips and Apar Industries showed the strongest long-term performance among listed stocks.
Investors should look out for short-term volatility while investing in small-cap stocks, as they react quickly to earnings and market sentiment.
Small-cap stocks are appealing options for investors who look for high-growth opportunities beyond large and mid-cap names. These companies, though smaller in size, often show strong long-term returns when business execution and sector conditions align. As 2026 approaches, many small-cap stocks stand out based on price trends, multi-year performance, and market capitalisation.
Before we explore the best small-cap stocks in India for 2026, let’s understand how they are classified.
As per SEBI classification, small-cap stocks include companies ranked 251 and beyond based on market capitalisation. These businesses are typically in developing or expansion phases. While they carry higher volatility, they can also deliver faster growth compared to larger peers when economic conditions are supportive.
Here are the top high-growth stocks of small-cap companies in 2026 based on data taken at press time from INDmoney:
CRISIL stock is trading at Rs. 4,719, down 0.14% in one day and 16.83% over one year. However, the longer-term picture remains strong, with 60.02% returns over three years and 142% over five years. The stock has a market capitalisation of Rs. 34,510 crore, supported by its dominant position in ratings and analytics.
Godrej Industries is priced at Rs. 1,023.60, down 2.9% daily, but it has delivered 125.46% gains over three years and 136.51% over five years. Its market cap stands at Rs. 34,475 crore, reflecting confidence in its diversified business structure.
Central Bank of India trades at Rs. 37.34, down 2.68% in a day. Despite short-term weakness, it has posted 169.60% returns over five years. The stock has a market capitalisation of Rs. 33,798 crore, highlighting the turnaround potential in public sector banks.
Godfrey Phillips' stock has emerged as one of the strongest long-term performers. At Rs. 2,146.40, the stock is down 0.64% daily but up 36.40% in one year. It has also given returns of 202.65% over three years, and a massive 567.91% over five years. Its market cap is Rs. 33,480 crore.
Premier Energies is trading at Rs. 730.25, down 2.9% daily and 39.75% over one year. While recent performance has been weak, the stock’s Rs. 33,080 crore market cap keeps it on the investor radar due to long-term renewable energy growth potential.
Apollo Tyres shares are priced at Rs. 519.95, up 0.46% in one day and 9.33% over one year. Over five years, the stock has gained 169.26%, with a market capitalisation of Rs. 33,022 crore. The hike is supported by improving demand and margins.
Apar Industries stands out with exceptional long-term growth. Trading at Rs. 8,201, the stock is down 22% over one year, but has surged 351.77% over three years and 2,157.36% over five years. The high returns over longer durations reflect strong execution in cables and conductors by the company.
Lastly, KPIT Technologies trades at Rs. 1,180.30, down 2.33% daily and 17.47% yearly. However, it has delivered 64.94% returns over three years and 763.74% over five years, backed by demand for automotive software.
Also Read: Stock Market Today: Sensex Trades at 83,961, Nifty Slips 0.23% as PSU Banks Gain 1%
Small-cap stocks tend to react quickly to earnings, expansion plans, and sector trends. They are known to face sharp price swings due to lower liquidity and higher sensitivity to market sentiment. However, as India’s economy grows, sectors like infrastructure, healthcare, technology, and energy may continue to offer opportunities in this segment. Investors can review debt levels, management quality, and long-term growth visibility to reduce risks of investing in small-cap stocks in India in 2026.
Also Read: Top Performing Small Cap Stocks to Check Out This Weekend
The best small-cap stocks in India for 2026 show a mix of short-term volatility and strong multi-year growth. Stocks like Godfrey Phillips, Apar Industries, etc highlight how sustained business performance can reward long-term investors despite short-term dips. Investors should keep a close eye on price performance, corporate updates, and global cues before making any purchases.
1. What are small-cap stocks in India?
Small-cap stocks in India are publicly traded shares listed by the SEBI in the 251st position and beyond based on the market capitalisation of a company, and also includes companies at the early stages of developing its businesses and those which are in a growth phase, these companies tend to be able to grow faster than larger companies; however, small cap stocks can carry more risk and price volatility than larger companies.
2. Why are small-cap stocks popular among investors?
Investors are drawn to the potential for high returns that come with investing in small-cap companies. Their rapid growth and developing phases allow for a bigger potential return when the business expands successfully. A small-cap company's size means that positive earnings or developments within the industry often have a greater influence on the company's stock price than they do with larger companies.
3. Why do small-cap stocks show high price volatility?
Compared with large-cap companies, small-cap stocks typically experience higher price volatility because they are responsive to market perception and company-specific information, however. After all, small cap companies have lower levels of liquidity than large cap stocks, it often results in prices moving more aggressively due to increased pressures from buying and selling during earnings announcements or economic events and/or changes in investor confidence.
4. Are small-cap stocks suitable for long-term investing?
To the extent that small cap stocks may benefit long-term investors who accept the risks and volatility that comes with investing in smaller companies, investing in quality companies over the course of a full market cycle can allow the long-term investor to capture the benefits of growth over time, however, achieving the maximum benefit and minimising the risks associated with small cap stocks requires prudent company selection and patience on the part of the long-term investor.
5. What should you look for before investing in small-cap stocks?
An investor should check for financial health indicators such as the amount of debt it is carrying, the amount of consistency in earnings, the level of quality in management with respect to experience and knowledge, along with the business model and plans for growth, as these types of stocks are heavily reliant on execution and long-term trends.
