From Godfrey Phillips to Navin Flourine: Small cap stocks that witnessed consistent mutual fund buying interest

Apart from that, the broader indices underperformed the benchmark indices by a wide margin, as the NIFTY Midcap 100 index traded flat and the Small Cap 100 index traded with nearly 5% losses. The underperformance is primarily due to muted earnings growth in Q1FY26 and a broader slowdown in the economy.

However, despite the broader pessimism around the small-cap stocks, there continued to be strong buying from FIIs and mutual funds in the select small-cap stocks. Below are the five stocks from the NIFTY Smallcap 100 index that witnessed consistent buying interest from domestic mutual funds.

Godfrey Phillips India

Godfrey Phillips, one of India’s leading cigarette makers, witnessed strong buying interest from domestic mutual funds as they more than doubled their stake in the company over a period of 4 quarters. Mutual funds' total stake in the company currently stands at 3.52% in Q1FY26, up from 1.7% in Q1FY25, indicating strong buying from the mutual funds.

The shares have nearly doubled in the same period, rising from ₹5,525 in Aug 2024 to ₹10,566 currently. In the current quarter, the sales have jumped nearly 40% to ₹1,486 crore, and net profit jumped 56% YoY to ₹356 crore.

Delhivery

The logistics major, Delhivery’s mutual fund stake increased from 19% in Q1FY25 to 27% in Q1FY26. The strong buying interest from domestic mutual funds was primarily due to their improving financial performance.

The company’s net profit for the quarter almost doubled to ₹91 crore in Q1FY26 from ₹56 crore in Q1FY25. The shares gave nearly 12% returns in the same period, as FII selling kept the shares under pressure. The foreign investors pared their stake in the company from 61.6% in Q1FY26 to 52.9% in Q1FY26.

However, the company has substantially improved its financial position over the years, going from being a loss-making company to now a profitable one.

Aster DM Healthcare

Aster DM Healthcare is one of the leading healthcare players in India with a strong presence in the Gulf region. It has the second-largest hospital network in South India, with the largest bed capacity in Kerala, 2nd in Andhra and 3rd in Karnataka.

Similar to the above players, the company witnessed strong buying interest from mutual funds as they increased their stake in the company.

As of Q1FY26, the mutual funds hold a 23.8% stake, up from 15.7% in the previous year’s similar period. In the same period, shares delivered over 52% returns, rewarding investors' faith.

Dr Lal Path Labs

One of India’s leading diagnostics players, Dr Lal Pathlabs, saw strong buying interest from domestic mutual funds as they increased their stake from 9.3% in Q1FY25 to 15% in Q1FY26.

While FIIs pared their stake in the company by a small margin from 55% to 53% in the same period. In the recent quarterly earnings, the company posted over a 10% jump in revenue and a nearly 30% YoY rise in the net profit. In the previous year, shares have remained largely unchanged with huge volatility.

Navine Flourine International

The company is engaged in the manufacturing of refrigeration gases, inorganic fluorides, and speciality organofluorines. The company’s revenue has increased consistently at a 17% CAGR over the past three years. However, the net profit of the company has increased marginally at 3% CAGR over the same period. In the past year, mutual funds have increased their stake from 13.7% to 17.9% in the latest quarter.

Over this period, the shares have increased by over 50% from ₹3,286 in August 2024 to ₹5,180 apiece as of Monday. Along with domestic mutual funds, foreign investors also increased their stake from 18% to 22% in the same period, aiding the overall rally in the share price.