When promoters reduce their stake in a company, it usually raises eyebrows. Many investors take it as a sign of fading confidence or an early warning of trouble ahead. But not every signal plays out the way one might expect. In some cases, promoter selling has coincided with a sharp business turnaround, sector tailwinds, or institutional interest, factors strong enough to outweigh concerns around stake dilution.

And that’s precisely what happened with a few lesser-known names that went on to deliver multibagger returns, even as their promoters trimmed holdings. Strong earnings growth, expanding margins, or aggressive capacity additions helped them win investor confidence.

It’s a reminder that promoter moves are only one piece of the puzzle. Let’s look at three such stocks, and is there still value left on the table?

Established in 2003, PG Electroplast is a leading player in Electronic Manufacturing Services (EMS). The company manufactures printed circuit boards (PCBs) and plastic components, including all kinds of plastic moulding. It has been a major beneficiary of India’s production-linked incentive scheme.

It offers services across diverse industries, including consumer electronics (coolers, air conditioners), automotive, and home appliances. It provides end-to-end assembly solutions in partnership with original equipment manufacturers (OEMs).

Its clientele includes leading OEMs, including LG Electronics, Jaguar, Kohler, Whirlpool, Godrej, AO Smith, Acer, Voltas, Orient Electric, Blue Star, Crompton, Carrier, etc.

Promoters’ stake in the company declined from 69.8% as on March 31, 2021, to 43.7% as on June 2025. During the same period, Foreign Institutional Investors (FIIs) stake increased from 1% to 13%.

Domestic Institutional Investors (DIIs) stake also increased from zero to 19.1%. As a result, its share price has multiplied investors’ money by 190 times in the last five years. Your investment of ₹1 lakh 5 years ago would have been worth ₹19 million today.

The company operates in four business verticals. The product business, encompassing room air conditioners, washing machines, and air coolers, remains the leading revenue driver, contributing 72% to its total revenue of ₹48.7 billion in FY25.

The expansion of this segment, which accounted for 33.7% of total revenues in FY21, has been a key growth driver owing to the industry tailwind. Revenue from the product business has grown 17x over four years, at a compound annual growth rate (CAGR) of 97%, increasing from ₹2.3 billion in FY21 to ₹35.3 billion in FY25.

The remaining came from plastic moulding (20.2%) and consumer electronics (7.2%).

Turning to the financials, in FY25 revenue rose 77% year-on-year (YoY) to ₹48.7 billion, despite a drop in average selling price. Net profit increased 112% to ₹2.9 billion, with margins expanding 70 basis points (bps) to 10.7%.

With operating leverage playing out, return on capital employed (ROCE) improved by 530 bps to 26.9%. However, return on equity (ROE) declined 410 bps to 15%, primarily due to equity dilution.

Looking ahead, the company expects its revenue to grow 33% YoY to ₹72 billion in FY26, while net profit is projected to grow 39% to ₹4.1 billion. The company is receiving increasing business opportunities from both new and existing customers.

Accordingly, it is constructing a new greenfield room air conditioner plant in Bhiwadi, a washing machine facility in Greater Noida, and a refrigerator plant in South India. It is also building a compressor manufacturing facility to reduce dependence on Chinese imports.

From a valuation perspective, the stock trades at a P/E of 76x, well above its four-year median of 55x.

Home First is an affordable housing finance company with a pan-India presence. It serves first-time home buyers with a monthly income of over ₹50,000. Its assets under management (AUM) stood at ₹127 billion in FY25.

The company is a key beneficiary of the growing housing demand in India, with consistent financial performance. This is reflected in its AUM mix, with 84% coming from home loans, with an average ticket size of ₹1.2 million.

Promoters’ stake in the company declined from 33.7% as on March 31, 2021, to 12.5% as on June 2025. During the same period, FIIs’ stake rose from 10.8% to 36.5%. DIIs first reduced their stake from 42.6% to 8.4% in March 2023, and then increased it to 21.2% in June 2025.

The company is geographically well-diversified, with a presence in 13 states. Gujarat accounts for 29% of gross loan assets, followed by Maharashtra (13.3%), Tamil Nadu (13%), Telangana (8.5%), and Madhya Pradesh (8.2%).

In FY25, disbursements increased by 21% to ₹48 billion, resulting in a 31% rise in AUM. In terms of loan mix, housing loans constitute 84% of AUM, followed by loans against property (15%) and shop loans.

Around 68% of borrowers are salaried, while 32% are self-employed. The borrower base is relatively low-risk, with an average credit score of 746. The company also boasts a strong collection efficiency of 99.4%.

Driven by strong AUM and disbursements, net interest income surged 20% to ₹5.7 billion. However, the net interest margin fell to 5.2% from 5.8% due to higher costs of funds.

Credit quality remained healthy, with flat gross non-performing assets (NPAs) at 1.7% and net NPAs at 1.3%. However, credit cost increased 13% to ₹2.8 billion, primarily led by a 10 basis point increase in net NPAs.

Still, net profit rose 25% to ₹3.8 billion. Return on assets declined slightly by 30 bps to 3.5%, while return on average equity improved by 100 bps to 16.5% in FY25.

Looking ahead, growth in AUM is expected to be driven by expansion in markets such as Andhra Pradesh, Uttar Pradesh, Tamil Nadu, Madhya Pradesh, and Rajasthan. The company plans to add 30 to 40 branches each year.

It currently holds a 2% market share in affordable housing and aims to achieve a 4-5% share within 3-5 years. It expects AUM to grow by 26-30%, driven by a 20-25% increase in disbursement.

The valuation also reflects its strong financial growth. It is trading at a price-to-book multiple of 5x, which is much higher than its 4.5-year average of 4.2x.

IRB is one of the largest private roads and highways listed integrated infrastructure developers in India. It has the largest highway asset base in India, worth ₹800 billion, with an average residual concession period of 21 years.

With a road portfolio of 15,444 km across 12 states, it holds a 10% market share in all India toll revenues. The portfolio is diversified across the hybrid annuity model, toll-operate-transfer (TOT), Build-Operate-Transfer, and the hybrid annuity model.

It holds a 33% market share in TOT projects awarded so far. IRB financials are stable, with inflation-linked toll price and concession period to traffic. This also stems from its approach of de-risking capex through detailed site studies and traffic due diligence.

Promoters’ stake in the company declined from 58.6% as on March 31, 2021, to 30.4% as on June 2025. During the same period, FIIs’ stake increased from 15.6% to 44.4%. DIIs first trimmed their stake from 11.4% to 9.3%.

Looking at its financials, revenue declined 2.5% year-on-year to ₹78 billion in FY26. The decline was primarily due to a 9.7% fall in construction segment revenue, which stood at ₹45.8 billion, accounting for 58.5% of the total.

Subdued project awarding and the impact of central elections weighed on the broader sector.

Its other segments, Infrastructure Investment Trusts (InvITs) and Toll-Operate-Transfer (ToT/BOT), showed steady growth. Revenue from the ToT/BOT segment rose 4% to ₹24.8 billion, contributing 32% to total revenue. This was followed by InvITs, where revenue rose 23% to ₹7.6 billion, making up 10% of the total.

The company’s blended margin remained flat at 50%. While net profit (before exceptional items) rose 12% to ₹6.8 billion, driven by cost optimisation. IRB’s total order book stands at about ₹31,000 crore, providing revenue visibility for about 4 years.

The company is also expected to benefit from faster awarding of road contracts in the current fiscal. It trades at a P/E of 29x, which is nearly double its 10-year median of 15x.

Promoter stake sales often raise doubts, but in these three cases, institutional confidence, strong financials, and sector tailwinds have driven rerating. While valuations now reflect much of the optimism, the businesses continue to execute on growth plans.

Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data was not available have we used an alternate but widely used and accepted source of information.

The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.

Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.

A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.

Disclosure: The writer and his dependents do not hold the stocks discussed in this article.

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