Stock to buy for short-term: Anand Rathi sees big upside in THIS small-cap stock under ₹50

Anand Rathi Picks Small-Cap Stock Below ₹50 for Short-Term Gains

In the ever-evolving world of equity markets, small-cap stocks often present golden opportunities for investors seeking high returns in a short period. Anand Rathi, one of India’s leading financial services firms, has identified a promising opportunity in a small-cap stock trading below ₹50, projecting a sizable upside in the coming weeks.

According to a recent research note by the brokerage, Shaily Engineering Plastics Ltd (NSE: SHAILY) is their top short-term pick, with analysts forecasting a potential upside of over 40% from current levels.

Why Shaily Engineering Plastics?

Despite being a relatively under-the-radar name, Shaily Engineering Plastics has shown impressive growth in its operational metrics. The company is a manufacturer of high-precision plastic components, catering to sectors such as healthcare, FMCG, personal care, and home furnishing.

As of July 14, 2025, the stock is trading at around ₹47 per share, having corrected from its 52-week high of ₹85. However, analysts at Anand Rathi see this as a strategic accumulation opportunity, citing strong demand recovery and a robust order book.

“We believe the current price offers an attractive entry point for short-term traders. With improving margins, a healthy pipeline of exports, and positive cash flows, Shaily is well-positioned to outperform,” said Vinit Bolinjkar, Head of Research at Anand Rathi.

Key Catalysts for Upside

Anand Rathi’s bullish stance is backed by a series of encouraging business developments:

• Export Demand Rebound: The company has witnessed a surge in export orders, especially from North American clients in the healthcare and FMCG space.

• Operational Efficiency: Cost-cutting initiatives and automation have started reflecting in better EBITDA margins, which rose from 10.2% to 13.5% YoY in the latest quarterly results.

• Strategic Expansion: Shaily is adding capacity in Gujarat to cater to new large-volume contracts. This is expected to boost revenue growth in FY26.

• Strong Promoter Holding: With promoters holding over 50% stake, and no major pledging of shares, investor confidence remains high.

Market Context: Small-Caps Gaining Traction

India’s small-cap segment has seen renewed interest in 2025 as retail participation grows and broader market sentiment remains positive. The Nifty Smallcap 250 index has gained nearly 22% YTD, outperforming both the Sensex and Nifty 50.

“In the current market cycle, small-cap stocks are benefiting from liquidity flows and sectoral tailwinds. Stocks like Shaily offer a good mix of valuation comfort and growth potential,” said Mehul Savla, Director at RippleWave Equity Advisors.

The overall optimism in mid and small-cap counters also reflects confidence in India’s manufacturing resurgence and the government’s push for “Make in India.”

Technical Analysis: Ready for a Breakout?

From a technical perspective, the stock has formed a strong base around ₹45, showing multiple support tests. Analysts at Anand Rathi note the following bullish indicators:

• RSI trending upwards from oversold zone (currently at 52).

• 20-day and 50-day moving averages are on the verge of a bullish crossover.

• Breakout from the descending channel formation on daily charts.

“If the stock sustains above ₹48 on closing basis, we may see a swift rally towards ₹66–₹68 levels in the next 4–6 weeks,” said Ravi Singh, Technical Analyst at Anand Rathi.

Investor Outlook: What Should You Do?

While small-cap investments carry higher risks due to volatility and liquidity constraints, the current risk-reward setup in Shaily Engineering Plastics is compelling for short-term investors with a moderate risk appetite.

Anand Rathi’s Recommendation:

• Buy Range: ₹46–₹48

• Target Price: ₹66

• Stop Loss: ₹42

• Time Frame: 4–6 weeks

For retail investors looking for short-term alpha, Shaily Engineering Plastics under ₹50 offers a rare combination of value, growth, and momentum. With supportive fundamentals, positive institutional outlook, and strong technical setup, the stock could be one of the smart bets in the small-cap space this earnings season.

However, investors should remain cautious, follow stop-loss levels diligently, and avoid overexposure to a single small-cap name.