Stocks to Buy: Lupin, Kalpataru Projects, Max Healthcare Among Top Mid and Small-Cap Picks for July

Mumbai, July 2, 2025 — As the Indian equity market enters the second half of 2025, analysts are drawing attention to select mid-cap and small-cap stocks that hold promising potential for the month of July. Amid macroeconomic tailwinds, moderate inflation, and continued institutional interest in quality counters, market experts are betting on stocks like Lupin, Kalpataru Projects International, and Max Healthcare Institute for outperformance.

While the benchmark indices—Nifty 50 and Sensex—have shown resilience, the spotlight is gradually shifting toward fundamentally strong yet relatively under-owned mid-cap and small-cap names. Let’s explore why these three stocks have made it to July’s top stock picks list.

Lupin Ltd: Pharma Play with Strong Upside Potential

Lupin, the Mumbai-based pharmaceutical giant, has been on analysts’ radar as the company continues to report strong US sales, aided by new product launches and increased demand for generics. After a subdued 2022–2023, Lupin's turnaround in profitability and operating margins has been notable.

“Lupin has shown a strong earnings recovery with better product mix and cost optimization. With robust ANDA pipeline and steady approvals, we expect earnings momentum to continue in FY26,” said Siddharth Goenka, Senior Research Analyst at JM Financial.

The stock has surged nearly 28% YTD and is still trading at a forward PE of around 20x, which is reasonable for a company of its size and growth prospects. Lupin’s focus on respiratory and cardiovascular therapies, as well as its ramp-up in the U.S. and India generics market, makes it a defensive pick with growth potential.

Kalpataru Projects: Infra and Power Transmission Tailwinds

Kalpataru Projects International Ltd (KPIL), a leading EPC player in power transmission, railways, oil & gas, and buildings sectors, has emerged as a multibagger in the making. The company recently bagged orders worth ₹2,100 crore across its transmission & distribution and international markets verticals, solidifying its order book of over ₹60,000 crore.

“Kalpataru Projects offers a unique play on India’s infrastructure and energy transformation. Its diversified order book, execution capabilities, and debt reduction strategy position it well for re-rating,” said Mehul Desai, Portfolio Manager at Axis Securities.

The stock has climbed over 60% in the past 12 months and continues to draw institutional interest. With government push on electrification, logistics, and cross-border grid connectivity, KPIL is expected to post double-digit earnings growth in FY26.

Max Healthcare: Riding the Healthcare Wave

Max Healthcare Institute Ltd, one of the largest private sector healthcare providers in North India, remains a favored stock among analysts tracking the healthcare space. The company reported strong Q4FY25 results, driven by higher occupancy rates, increased surgeries, and better average revenue per occupied bed (ARPOB).

“Max Healthcare's premium positioning, geographical concentration in metro cities, and strong balance sheet make it a long-term compounder. The healthcare sector continues to offer structural tailwinds,” said Avni Shah, Healthcare Sector Analyst at Motilal Oswal Financial Services.

Max is also expanding its network through brownfield and greenfield projects and recently acquired a 300-bed facility in Gurgaon. With a clean capital structure, ROCE above 20%, and an expanding margin profile, Max Healthcare is set to benefit from India’s rising health awareness and insurance penetration.

Market Context: Mid and Small-Cap Rotation Expected

In recent months, the Indian market has witnessed a rotation from large caps to mid and small caps, driven by relatively attractive valuations and strong earnings delivery. According to NSE data, the Nifty Midcap 150 and Nifty Smallcap 250 indices have outperformed the Nifty 50 over the past three months.

“We are entering a stock-picker's market. While valuation concerns remain in select small-cap pockets, quality names with growth visibility and free cash flow generation should be favored,” stated Ramesh Damani, veteran investor and BSE board member.

Investor Outlook: Focus on Fundamentals, Stay Selective

As we move into July, investors are advised to focus on stocks with strong business models, earnings visibility, and reasonable valuations. The recent correction in certain pockets of the mid-cap space has opened up opportunities for long-term investors.

Brokerage houses including ICICI Securities, Kotak Institutional Equities, and Axis Direct have reiterated their ‘Buy’ ratings on Lupin, Kalpataru Projects, and Max Healthcare, respectively.

Experts suggest a diversified approach with a tilt toward sectors benefiting from domestic economic growth—like pharmaceuticals, healthcare, and infrastructure—can help optimize portfolio returns for the second half of CY25.

July 2025 appears to be a promising period for discerning investors looking beyond the large-cap universe. Stocks like Lupin, Kalpataru Projects, and Max Healthcare stand out due to their sectoral tailwinds, earnings strength, and strategic positioning. While short-term volatility cannot be ruled out, these picks are poised to benefit from India’s structural growth narrative.

Investors should consult with financial advisors and conduct due diligence, especially in a market environment characterized by sharp sectoral rotation and policy-sensitive developments.