Turnarounds don’t happen every day in the stock market, but when they do, they can create outsized opportunities.
Turnarounds are companies that were written off a few years ago because of poor management decisions, heavy debt, or just being in a bad business cycle.
Now, some of them are quietly fixing the basics, cutting waste, paying down debt, and getting their growth engines back on track. That’s why keeping an eye on turnaround stories matters.
They won’t all succeed, but the ones that do often reward early believers far more than steady compounders.
Let’s break down three Indian stocks that are starting to show those early signs of a genuine recovery and deserve a spot on your watchlist.
Take a look…
#1 Greaves Cotton
First on the list is Greaves Cotton, a company with an engineering legacy spanning over 165 years.
It has evolved from being primarily a single-cylinder diesel engine company to a fuel-agnostic, multi-product company, building a complete sustainable mobility ecosystem.
But this transformation wasn’t easy for the company.
On one hand, it faced the looming threat of its single-cylinder diesel engine business declining over the years, and on the other, it had to invest in its future for years without seeing a single rupee of revenue in return.
This dual-front effort resulted in a subdued financial performance over a decade. But now, things seem to be turning around for the company.
Greaves Cotton posted a strong set of numbers in the first quarter of FY 26, with revenue 16.5% yoyy and operating benefits with 108.6% yoy.
The operating margin also improved rapidly from 4.3% to 7.6% a year ago. This marks a pronounced turnaround compared to the FY25, when the frequent damage in the e-dubility arm is weighed over the overall performance and even the credit rating downgrade is triggered.
The rebound in 1qfy26 was largely inspired by the strength of its main businesses. Euro-V+ auto engine and CPCB IV+ Gensets supported by healthy demand, exports to 14% revenue, which also promoted margin.
On the e-mobility side, while FY25 was difficult with operating losses and a dip in market share, the latest quarter brought signs of recovery.
1QFY26 revenues were Rs 1.37 bn, with its e-2W business achieving an 84% YoY retail sales growth. Its market share also increased to 4.2% from 3.4% in the previous year.
The company is now sharpening its EV strategy by moving toward a demand-driven model and focusing on margin optimisation.
Greaves Finance also significantly scaled up its assets under management (AUM) to Rs 3 bn, reflecting strong portfolio quality and prudent risk controls.
Greaves Cotton Stock Price – 1 Year
The management is focused on operational excellence, cost optimisation, and diversifying the portfolio beyond the shrinking diesel 3W engine market. They’re working to maintain operating margins in the 13-14% range for the standalone business.
#2 Deep Industries
Coming second on the list is Deep Industries, a comprehensive solutions provider in the oil and gas support services sector, with over three decades of experience.
Its service portfolio covers more than 70% of the post-exploration value chain in the oil and gas sector.
Key offerings include natural gas compression services, where it operates one of India’s largest fleets, drilling and workover rig services, possessing 12 workover rigs and 6 drilling rigs, and natural gas dehydration services, being a pioneer in providing these systems on a Build, Own, and Operate basis.
Being present in the oil and gas field means the company’s business is inherently cyclic.
Due to of subdued exploration activity in the oil and gas sector, the company’s topline and bottom line were stagnant for the last 5 years.
The company’s latest financial results indicate a significant turnaround from the previous fiscal year’s consolidated performance.
The turnaround is evident in the revenue for 1QFY26, as it rose 61.6% YoY. Operating profit grew 61.2% YoY. The net profit for the quarter was up 59.3% YoY.
This strong growth is mainly due to the efficient execution of various contracts awarded in the prior year, with no contribution from the recent Kandla Energy acquisition yet.
Deep Industries Stock Price – 1 Year
Deep Industries has built a solid growth runway, with its order book reaching Rs 30.5 bn as of August 2025.
This strong pipeline gives the company confidence to maintain over 30% YoY revenue growth for the next two to three years.
Key developments supporting this positive outlook include successfully taking charge of the Rajahmundry field enhancement operations, which are expected to significantly boost output and generate around Rs 1.4 bn in full-year revenue from FY26.
The company is actively pursuing the recovery of old receivables, totalling over Rs 3.5bn from Kandla and Dolphin, and is optimistic about retrieving a substantial amount, with no further write-offs expected in FY26.
This operational momentum, coupled with a favourable policy environment focused on national energy security, positions Deep Industries for sustainable growth and long-term value creation.
#3 HEG
On number three comes HEG Manufacturer of graphite electrodes, which are crucial consumables for Electric Arc Furnaces (EAF) used in steel production.
These electrodes function as electrical conductors in EAFs, generating the heat necessary to melt steel scrap.
HEG has one of the world’s largest single-site graphite electrode plants. Following a recent expansion, it has become the third-largest producer in the Western world.
The company maintains a competitive cost position, operating as one of the lowest-cost producers globally.
An important part of its production, 65–70%, is exported to about 35 countries, indicating a diverse sales footprint and customer base.
The company’s performance was weak due to the mainly challenging market conditions in the previous quarter (1qfy25).
About 1.2% fell due to ongoing macroeconomic headwind and muted industrial recovery outside China. China’s steel production declined 2.4%, but its surging exports increased global competition and exerted pressure on steel prices.
Consequently, the graphite electrode market faced challenging conditions, with weak demand and spot market prices under sustained pressure.
The industry’s average utilisation level outside China was low, estimated between 60% to 65%.
HEG Stock Price – 1 Year
But things seem to have changed for the better. In its latest results, HEG recorded a revenue growth of 8%. The operating profit increased by 172%, and the net profit increased 355% yoy.
This notable improvement positions HEG as a potential turnaround stock. This is supported by several factors.
The global transition towards low-emission Electric Arc Furnace (EAF) steelmaking continues to gain momentum, driven by regulatory actions and decarbonisation targets.
The EAFS has a much lower carbon footprint than the traditional blast furnace, which makes them central for the change of the steel industry.
This change is expected to generate adequate incremental demand for graphite electrodes, which is estimated to be 150,000 to 200,000 tonnes annually by 2030 (except China).
In the last two years, about 11 meter tonnes of new EAF capabilities have been installed in the western world, by 2027 expected 50–55 meters tonnes and an additional 40 meter ton between 2028 and 2030, which has a new capacity of about 100 meters.
This unprecedented growth in EAF capacity is expected to increase the demand for electrodes.
Additionally, some other industry’s large companies are expected to have supply rationalization and currently low prices are expected to stabilization and pricing recovery.
HEG is addressing an expansion plan to increase its current capacity by January 2028 to increase its current capacity to 100,000 tonnes, which will reduce the cost and increase the market share.
Management believes that once the level of global graphite electrode industry uses 80% to 85%, prices will be firm, which they estimate within two to three quarters.
Conclusion
Turnaround stocks never go up in a straight line. Some will stumble, others will exceed every expectation.
What matters is spotting the companies where the fundamentals are genuinely improving, not just where the share price looks cheap.
Therefore, it’s important to conduct thorough research on financials and corporate governance before making investment decisions, ensuring they align with your financial goals and risk tolerance.
Happy investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here…
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.