The Piotroski Elite: Top 5 Small-Cap Stocks to Watch in India for 2026

The Piotroski F-Score or simply called Piotroski Score is a simple yet effective 9-point stock screening/scoring formula/system developed by Stanford accounting Professor Joseph Piotroski in his 2000 research paper. The intention was to identify corporates/businesses with healthy liquidity, robust profitability, strong balance sheet and resilient operating efficiencies.

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How to calculate the Piotroski Score?

As per the PFS formula, each of the nine simple criteria rewards 1 (one) or 0 (zero) points if met or not met. The total PF score ranges from 0 (minimum-weakest) to 9 (maximum-strongest financial position). Generally, higher scores (7-9) indicate sound financials/fundamentals and potential outperformance, while lower scores (0-3) typically indicate the opposite-weak/distress and a potential ‘value traps’ (underperformance). The Piotroski Score is a simple but useful basic screening tool for value investors. This tool helps investors to screen potentially multibaggers or fundamentally strong companies with robust profitability & other efficient ratios, and resilient balance sheets for mid to long term investment. In today’s world, core income without D&A (Depreciation & amortisation) and any other & exceptional income should be more appropriate than total net income in the calculation of the PFS- Piotroski F-Score.

Broad Criteria behind Piotroski Score-2025-24 (Y2-Y1)

Profitability (maximum 4 points possible):

Net Income: 2025-24>0=1 point or 0
ROA(Return on Assets): 2025-24>0=1 or 0 (ROA= Net Income / Total Assets)
OCF (Operating Cash Flow): 2025-24>0=1 or 0
2025-OCF>2025-Net Income=1 or 0 (accrual quality or % of net income conversion into OCF to check whether earnings are backed by actual cash, not aggressive accruals)

Leverage, Liquidity, and Funding (maximum 3 points possible):

Lower Long-term Debt Ratio (LDR): 2025 ≤ 2024=1 or 0 (LDR= Long-term debt / total assets)
Higher Current Ratio: 2025>2024=1 OR 0 (Current Ratio=Current Assets/Current Liabilities)-improved short term liquidity
No equity dilution: O/S shares -2025≤2024=1 or 0 (No fresh issuance of equity shares)

Operating Efficiency (Maximum 2 points possible):

Gross Margin: 2025≥2024=1 or 0
Asset Turnover: 2025≥2024=1 or 0 (Asset Turnover = Revenue / Beginning-of-year Total Assets)-Better utilisation of assets to generate sales

Time Technoplast Limited (TTL): PFS: 9

TTL is a manufacturer of industrial packaging and automotive components, techs & innovation-driven polymer and composite/secondary products, using advanced blow-moulding and composite technologies.

The company was established in 1989 and headquartered in Mumbai- it has grown from a local to a global player (MNC) with manufacturing (MFG) facilities in India, the Middle East (ME), Africa and South East Asia.

TTL is an integrated and fully diversified composite polymer manufacturer across the value chain:

Industrial packaging (drums, containers, pails for chemicals and lubricants)
Automotive components (fuel tanks, air ducts)
Composite cylinders (LPG/CNG for safer, lighter alternatives to steel)
Infrastructure pipes, and lifestyle products (matting, furniture)

TTL primarily earns revenues from B2B clients (industrial, OEMs, and automotives), including exports

TTL benefits from a shift towards lightweight and durable plastics

It ensures cost efficiencies from scale and backward integration in raw materials.

With a market cap around ₹8,900 crore (early 2026), this small cap has a perfect Piotroski score of 9, which reflects improved profitability, efficient asset use, and stable leverage.

The company is ideal for India's packaging and auto ancillary boom.

IRB Infrastructure Developers Limited: PFS: 9

The company was established in 1998 and is a part of the IRB group, headquartered in Mumbai

IRB Infra is one of India’s leading developers/contractors of highways in PPP mode (Public-Private-Participation).

IRB has executed numerous BOT (Build-Operate-Transfer) and TOT (Toll-Operate-Transfer) in various big highway projects across India.

IRB Infra primarily focuses on India’s road infra through EPC (Engineering, Procurement & Construction), BOT, TOT, and hybrid annuity models.

It develops, operates, and maintains toll roads, collecting user fees while benefiting from annuities or premiums from the government/NHAI (under the PPP mode & road monetisation policy)

IRB Infra is also diversified into airport-based infra and real estate with annuity-based revenue for stability & visibility amid steady traffic growth and ongoing asset monetisation

Despite being a small-cap with a market cap of around ₹25,000 crore, IRB Infra has a higher Piotroski score at 9 compared to the median sector score of 5.

A high Piotroski score indicates potential deleveraging and strong cash flow due to India’s huge thrust on highway expansions under Federal schemes like Bharatmala.

Emami Limited: PFS 9

Emami was founded in 1974 and is headquartered in Kolkata (WB).

Emami is one of the leading players in India’s FMCG space, including personal and healthcare products.

It has iconic brands like Boroplus, Navratna, and Zandu with a strong domestic presence and growing global (exports) footprints.

Emami manufactures and markets ayurvedic/herbal-based items across categories: cooling oils, balms, skin creams, lotion, fairness products, oral care, healthcare (Zandu brands) and also edible oils (Mustard, Sunflower, etc.) along with varieties of cooking medium spices.

Emami has a well-structured & vast pan-India distribution network of traditional wholesalers/dealers, big & small/Kirana retailers to modern-day app-based quick service trade/e-commerce giants (like Instamart, Zepto, Blanket, and Big Basket, etc.).

Incremental & sustainable top line growth comes from steady market penetration due to comparatively lower/competitive pricing & brand equity (value for money), growing rural and export markets.

Emami scrip has a market cap of around ₹22000 cr with a Piotroski score of 9 vs sector median 5.5.

This indicates robust ROE, EOCE, efficient usage of working capital, high operating margin (27.5% vs 19.9% sector median) and sustained profitability even as a competitive FMCG player.

In brief, Emami may be a bright spot in the Indian FMCG & OTC segment, with a strong balance sheet, other operational leverage and is expected to retain the spot due to rising discretionary spending and growing awareness about value for even reasonable pricing.

Urban, semi-urban consumers are now buying daily FMCG products like Mustard oil by comparing prices of various other brands in the app-based digital age ‘kirana’ space; prices of Emami generally stay at the lower/middle end of the pyramid despite an established brand, which is its biggest advantage to capture growing market share.

Nitin Spinners Limited: PFS 9

Nitin Spinners is a vertically integrated textile manufacturer specialising in cotton yarn and fabrics.

The Company is based in Bhilwara, Rajasthan and was established in 1992.

Nitin Spinners engages in ginning, spinning (yarn production), weaving, and processing to produce denim, shirting, and home textiles.

The Company has a significant export market globally and also has a resilient local market, serving various domestic apparel brands (B2B segments)

Nitin Spinners is a fully integrated textile company with backward integration from cotton sourcing to finished fabrics manufacturing-ensures quality with cost controls

Targeted capacity expansions, sustainable demand for quality cotton fabrics, and a favourable USDINR FX equation for exports, Nitin Spinners may be in a sweet spot

The Piotroski Score of 9 (vs sector median 6) indicates a strong probability of turnaround, margin expansion, and efficient operations.

Nitin Spinners may be an example of a classic small-cap textile jewel-befitting from India’s textile export push and supply chain diversification tailwinds, despite some cyclical tailwinds like Trump (U.S.) tariffs.

Gokul Agro Resources Limited: PFS 9

Gokul Agro was incorporated in 2014 and is a part of the Gokul Group- headquartered in Ahmedabad (GJ)

After demerging with parent operations, the Company now focuses on edible oils & agri/farm products

Gokul Agro processes and refines vegetable oils (soya, palm, sunflower), manufactures vanaspati, bakery fats, and value-added products like castor derivatives.

It operates refineries and also trades commodities, with a mix of B2B (industrial buyers) and branded retail sales (B2C).

Gokul Agro is ensuring steady revenue growth with stable margin through higher volume, and growing exports of castor oil supported by a weakening rupee and proper hedging

Despite being a small/microcap stock, Gokul Agro’s high Piotroski score of 9 vs sector median 6 indicates superior operating efficiencies and robust balance sheet management in a volatile, but growing agri-commodity & food processing sector.

Conclusions

In summary, although the Piotroski Score is an effective & simple tool to scan/spot fundamentally solid companies, it’s not absolute. We have to combine other fundamental as well as technical tools in conjunction with the Piotroski score for optimum results.