MF Picks: 13 smallcap stocks with strong profit margins rally up to 163%, 5 turn multibaggers

When mutual funds quietly increase their exposure to fundamentally strong companies, it often sends a signal worth tracking. We set out to follow this smart-money trail. To do so, we screened BSE small-cap companies that reported strong year-on-year sales and profit growth of over 10% in the September quarter, while sustaining healthy profit margins above 10%. We further narrowed the list to companies that saw a rise in mutual fund shareholding during the September quarter compared with the previous quarter, excluding banking and financial stocks.Applying these criteria to the BSE small-cap universe resulted in a pool of around 74 stocks. We then layered in price performance filters, which showed that about 47 of these stocks have already generated double-digit returns in FY26. From this subset, we identified 13 standout performers that have delivered price returns ranging between 50% and 162% in FY26 so far, with five stocks emerging as multibaggers. (Data Source: ACE Equity) Institutional buying