Dolly Khanna, also called the “Queen of Small Caps,” by investors across the board, is very well known for her solid small cap picks and a remarkably successful track record. Investors trust her stock picking skills as she has an eye for spotting future multibaggers early on.
Backed by disciplined approach and strong research, combined with a focus on long-term value, she has made a name for herself in the markets. Currently her portfolio holds 11 stocks worth almost Rs 487 cr. Her portfolio is managed by her husband Rajiv Khanna and often, it leans towards more traditional stocks in manufacturing, textile, chemicals, and sugar industries.
So, when she decides to sell off 6 of her holdings in a single quarter, it does send the investor community into an overdrive, trying to figure out if these are strategic exits or signs of distress in the small cap space? Let us investigate.
#1 Exit: 20 Microns – Cashing out after 650% gains?
Incorporated in 1987, 20 Microns Ltd is in the business of Industrial Micronised Minerals and Speciality Chemicals. The company is India’s largest manufacturer of micronized to nano-sized minerals, and has a current market cap of Rs 743 cr,
As per Trendlyne, Dolly Khanna held a stake in the company which began with a 1.29% stake in September 2024 and went up to 1.99% for the quarter ending June 2025, before it fell below 1% as per exchange filings for the quarter ending September 2025. This means Khanna has partially or completely exited this stock.
The sales for 20 Microns have grown at a compound rate of a 12% from Rs 529 cr in FY 20 to Rs 913 cr in FY25.
The EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed from Rs 66 cr in FY20 to Rs 117 cr in FY25. That is a compounded growth of 12%.
As for the net profits, the company saw a compounded growth of 21% from Rs 24 cr in FY20 to Rs 62 cr in FY25.
The share price of 20 Microns Ltd was around Rs 28 in October 2020 and as on closing of 24th October 2025, it was Rs 211, logging in a jump of 654%.
The company’s share is trading at a current PE of 12x while the industry median is 22x. The 10-year median for 20 Microns is again 10x while the industry median for the same period is 12x.
The management commentary in the latest earnings presentation from August 2025 said, “We remain confident in achieving our 13-15% revenue growth guidance for FY26.Despite continued pressure on freight costs, the company is supported by stable demand, easing input costs, and strategic supply chain enhancements. Our focus will remain on margin improvement, product diversification, and geographic expansion, positioning 20 Microns for sustained growth and long-term value creation”.
#2 Exit: Zuari industries – loss-making conglomerate dumped?
Incorporated in 1967, Zuari Industries Ltd is in the business of real estate, investment services, engineering services, management services, manufacturing and trading of furniture, manufacturing and sale of sugar and its by products, ethanol and generation of power. The current market cap of the company is Rs 1,025 cr,
As per Trendlyne, Dolly Khanna bought a 1.17% stake in the company in June 2022, which was 1.65% for the quarter ending June 2025. And as per the recent exchange filings for the quarter ending September 2025, her holding has fallen below 1%, meaning a complete or partial exit.
The sales for Zuari have grown at a compound rate of just 5% from Rs 771 cr in FY20 to Rs 970 cr in FY25.
The EBITDA was a negative Rs 260 cr in FY20 and as for FY25, an EBITDA of 50 cr was logged in.
The net profit is an area of concern which could be a reason for Khanna’s exit from the stock.
| Year | FY20 | FY21 | FY22 | FY23 | FY24 | FY25 |
| Profits/Rs Cr | -396 | -98 | -35 | 309 | 713 | -94 |
The share price of Zuari Industries Ltd was around Rs 52 in October 2020 and as on closing of 24th October 2025, it was Rs 344, which is a jump of 562%.
The company’s share is trading at a negative PE due to a string of losses, while the current industry median is 17x. The 10-year median for Zuari however is 22x and the industry median for the same period is 10x.
Zuari Industries Ltd has raised a significant debt to support the operations of its subsidiaries and associates, including funding for its Sugar, Power, and Ethanol (SPE) division. In FY24, the company’s total borrowings stood at Rs 1,194.7 crore, including corporate guarantees. This has resulted in substantial debt repayment obligations amounting to approximately Rs 160 crore in FY25.
The company plans to take an additional Rs 202 crore in its joint venture, Zuari Envien Bioenergy Private Limited, for which it has extended corporate guarantees.
The other sell offs
Polyplex Corporation Ltd – A leading global PET film manufacturer with a polyethylene terephthalate (PET) film capacity of 4,78,500 metric tonnes (MT). It has over 35 years of experience in plastic films, 7 manufacturing facilities in 5 countries with multiple warehouses & liaison offices worldwide.
Rajshree Sugars & Chemicals Ltd – Amanufacturer and marketer of white crystal sugar and industrial alcohol engaged in three segments, Sugar, Cogeneration and Distillery.
Sarla Performance Fibers Ltd – A manufacturer and exporter of polyester and nylon textured, twisted and dyed yarns, covered yarns, high tenacity yarns and sewing thread with a strong customer base.
Talbros Automotive Components Ltd – A leadingbrand in manufacturing of Gaskets and Heat Shields, Forgings, Chassis Systems, Suspension Systems and Modules, Anti-vibration Components and Hoses.
Portfolio clean up or a bigger game at play?
Dolly Khanna has time and again proved that her stock picking and dropping skills are second to none, and in most cases, she laughs her way to the bank. And it catches more attention because she does this in a category that scares many investors away – Small Caps.
So, when she drops 6 stocks at once, it causes investors of all categories to stop and take notice. While the companies we saw today that Dolly Khanna dropped are lesser-known, they were sure interesting to her and were a part of her portfolio for quite some time.
Why did they fall out of favour is something only Khanna would know. But it does raise speculation if this was a portfolio clean up or is there something that Khanna is seeing which the average investor is bound to miss. Whatever it may be, it could be a clever idea to have these stocks on a Watchlist.
Note: We have relied on data from http://www.Screener.in and http://www.trendlyne.com throughout this article. 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 educative purposes only.
Suhel Khan has been a passionate follower of the markets for over a decade. During this period, He was an integral part of a leading Equity Research organisation based in Mumbai as the Head of Sales & Marketing. Presently, he is spending most of his time dissecting the investments and strategies of the Super Investors of India.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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.
