Haitong has published a list of its preferred mid- and small-cap stocks in India, spanning insurance, fintech, exchanges, consumer discretionary and related services. The brokerage highlighted companies it believes show tangible operational improvements, scalable business models or favorable growth trajectories.
Below are the ten companies and the rationale Haitong presents for each:
- GIC Re - Haitong notes that improved underwriting discipline and strategic exits from unprofitable lines have materially improved combined ratios for the reinsurer. The firm has also strengthened solvency, which has supported a rating upgrade in Haitong's view, and the brokerage expects this to facilitate a stronger international business book.
- PB Fintech - Policybazaar is characterized as a highly scalable, low-cost and asset-light insurance distribution platform. Haitong points to strong expansion in health and term insurance segments underpinned by rising penetration, rich customer data and growing reach into hybrid channels and Tier-2/3 cities. Haitong also highlights Paisabazaar and newer initiatives as a second growth engine driven by large-scale credit distribution and nationwide expansion of point-of-sale persons (PoSP).
- Star Health - While acknowledging that Star Health's growth has been moderating and its claims ratio remains elevated, Haitong sees encouraging signs in fresh business growth. The brokerage considers the elevated claims to be cyclical and notes that Star's distribution strength and ability to implement price increases should help the company adapt.
- One 97 Communications - Paytm is viewed as well positioned to capture rising retail digital payments adoption in India due to its leading market presence. Haitong emphasizes Paytm's focused efforts to digitize SME merchants and improved monetization capabilities, which have contributed to robust revenue growth. The brokerage expects core EBITDA and PAT to increase by roughly four times each over FY26-28E and forecasts return on equity to reach about 12% by FY28E.
- BSE Ltd - Despite regulatory headwinds, BSE has demonstrated resilience, with options premium average daily total turnover (ADTO) in Q1FY27-TD rising 11% quarter-over-quarter even after implementation of higher securities transaction tax (STT) rates. Haitong projects revenue and adjusted PAT (APAT) compound annual growth rates of 31% and 36% respectively over FY26-28E, driven by stronger investor participation, market share gains and diversified revenue streams.
- MCX Ltd - The commodity exchange is benefiting from healthy underlying liquidity, an uptick in average contracts traded and an influx of new customers. Haitong expects MCX's revenue and APAT to expand at approximate CAGRs of 29% and 33% over FY26-28E, supported by new product launches, increased commodity volatility and higher foreign portfolio investor participation.
- Cera Sanitaryware - Haitong anticipates growth from a sustained retail demand recovery from the quarter after Q3FY26 and from a revised strategy focused on brand premiumization. The brokerage sees the company as well placed to capture demand recovery and forecasts revenue and EBITDA CAGRs of 16% and 27% respectively over FY26-28E.
- HDFC AMC - HDFC Asset Management Company saw mutual fund average assets under management (AAUM) growth in line with the industry in FY26, and remains among industry leaders in equity AUM mix, a segment that generates attractive yields. Haitong highlights the company's disciplined operating cost structure and notes it has the lowest cost-to-AAUM ratio in the industry at 10 basis points. The brokerage values HDFC AMC at a target price of Rs 3,040.
- Minda Corporation - Haitong points to strong growth visibility for Minda, anchored by over Rs 100,000 million of lifetime order wins. Key growth drivers include instrument clusters, high-voltage wiring harnesses, switches and EV electronics. The brokerage expects the ramp-up of the Sunroof business, the Toyodenso Switch joint venture and consolidation of Minda VAST to support growth above industry levels.
- ITC - Haitong describes ITC as trading at reasonable valuations despite a strong growth trajectory and predominant exposure to the luxury segment, together with a net cash balance sheet. The brokerage expects double-digit medium-term growth supported by strong room revenue growth and rapid expansion in fee income. Operating margins are projected to expand by 230 basis points, which Haitong believes will underpin an approximate 15% EBITDA CAGR.
Summary - Haitong's shortlist emphasizes businesses showing operational progress, scalable distribution or product strategies and measurable growth levers. Several names have explicit medium-term financial targets from the brokerage, including multi-year CAGRs for revenue and APAT or EBITDA, and in one case a specific target price.
Key points
- Haitong's selections span insurance, fintech, exchanges, consumer discretionary and industrial suppliers, reflecting cross-sector opportunities in mid- and small-cap India.
- Several companies have quantified growth expectations over FY26-28E, including projected CAGRs for revenue, APAT or EBITDA, and profit multiple expansions for select names.
- HDFC AMC is singled out with a specific target price of Rs 3,040 and noted as having the industry's lowest cost-to-AAUM ratio at 10 basis points.
Risks and uncertainties
- Claims volatility in the health-insurance sector - Star Health's elevated claims ratio is noted as a current concern; if higher claims persist rather than proving cyclical, it could affect profit recovery in the sector.
- Regulatory and tax changes - BSE's options ADTO rose despite higher STT rates, but evolving regulatory or tax policy could influence exchanges' volumes and revenue.
- Execution and demand recovery timing - Several forecasts assume recoveries or successful ramp-ups (for example Cera's retail recovery and Minda's Sunroof and JV ramps); delays or weaker-than-expected demand would affect the projected CAGRs.
Haitong's list provides a cross-section of mid- and small-cap opportunities that the brokerage believes combine operational fixes, scalable franchises or secular demand drivers. The firm quantifies expectations for several companies over FY26-28E, while also flagging current challenges such as elevated insurance claims and regulatory headwinds in exchange businesses.