Uncharted Horizons: Asia's Hidden Gems and Latin America's Rising Stars in the Small-Cap Universe

The small-cap universe is a treasure trove of overlooked opportunities, particularly in emerging markets like Asia and Latin America, where companies are capitalizing on domestic growth, innovation, and strategic expansions. As global markets face headwinds from inflation and trade tensions, these nimble firms are poised to outperform. Let’s dive into five undervalued small-caps—three in Asia and two in Latin America—where growth is brewing beneath the radar.

Asia’s Hidden Gems: India’s Small-Cap Powerhouses

India dominates the list of Asian small-caps with strong fundamentals, driven by niche markets and strategic acquisitions.

1. Control Print Ltd (India): Dominating the Print Supply Chain

Sector: Printing machines, consumables, and services.
Growth Catalyst: Control Print’s 17% YoY revenue growth (to ₹978 million in Q1 FY25) is fueled by its 66% revenue share in high-margin consumables. The acquisition of V-Shapes S.r.l. (a packaging firm) expands its reach into Europe’s premium markets, targeting ₹4 billion in FY25 revenue.

Why Now? With a 19-20% domestic market share and a robust order pipeline, Control Print is leveraging its scale to fend off Chinese imports and capitalize on global demand for eco-friendly packaging.

2. EMS Limited (India): Building Water Infrastructure for Growth

Sector: EPC (Engineering, Procurement, Construction) for water/waste projects.
Growth Catalyst: EMS’ revenue surged 49.5% YoY to ₹2 billion in Q1 FY25, driven by a record ₹18 billion order backlog. The firm is expanding into real estate EPC, targeting ₹10 billion in FY25 revenue.

Why Now? India’s push to meet UN Sustainable Development Goals (water access targets) and urbanization are creating a $100 billion+ opportunity in water infrastructure. EMS’ selective project approach maintains 24-26% operating margins, a rarity in its sector.

3. Mayur Uniquoters Ltd (India): Synthetics for Global OEMs

Sector: Synthetic leather for automotive and footwear.
Growth Catalyst: Mayur’s 22.4% YoY net profit growth (to ₹374 million) stems from export OEM sales (21% of revenue). A $2 billion Mexico plant will serve U.S. automakers like Ford and Mercedes, shielding it from India’s BIS footwear standard disruptions.

Why Now? Synthetic leather demand is booming in EV interiors and luxury footwear, with Mayur’s scale and OEM partnerships positioning it to outpace competitors.

Global Picks: Latin America’s Undervalued Stars

Beyond Asia, two Latin American small-caps stand out for their sector dominance and valuation upside.

4. Telecom Argentina (TEO): Monetizing Argentina’s Digital Shift

Sector: Telecommunications.
Growth Catalyst: TEO’s $1.543 billion net income over 12 months reflects Argentina’s shift to digital services. With a 40% mobile market share and 5G rollout plans, it’s capitalizing on the Milei administration’s tech-friendly policies.

Why Now? Argentina’s inflation has dropped to a five-year low, reducing refinancing costs and boosting subscriber growth. A potential dividend yield of 6% adds stability.

5. BBB Foods (BBB): Mexico’s Discount Retail Disruptor

Sector: Discount retailing.
Growth Catalyst: BBB’s $677 million NYSE listing (2024) and a $593 million follow-on offering (Q1 2025) highlight investor confidence. It commands 15% of Mexico’s discount grocery market, with plans to open 100 stores annually.

Why Now? Mexico’s urban middle class is expanding, and BBB’s low-cost model (SKU count under 1,000) outperforms Walmart and Costco in accessibility.

The Bigger Picture: Valuation and Risks

• Valuation Edge: Asia and Latin America’s small-caps trade at a Shiller CAPE of ~37.5x, below the Russell 2000’s historical average. This implies ~8% annualized returns over the next decade.
• Risks:
• Trade Barriers: U.S. tariffs could hit Mexico’s BBB Foods (28% of GDP tied to U.S. exports).
• Commodity Volatility: Maharashtra Seamless (India) faces margin pressure from Chinese steel imports.
• Political Uncertainty: Argentina’s October 2025 elections may test Milei’s reforms.

Conclusion: The Case for Strategic Small-Cap Exposure

The five companies analyzed—Control Print, EMS, Mayur Uniquoters, Telecom Argentina, and BBB Foods—represent a mix of defensive and high-growth bets. Their collective traits include:
- Strong Order Backlogs: EMS ($18 billion) and Maharashtra Seamless ($18.1 billion) have tangible revenue visibility.
- Export Diversification: Mayur’s Mexico plant and BBB’s U.S. supply chain reduce local risk.
- Valuation Discounts: All trade at EV/EBITDA multiples below industry averages, with Mayur at 10x and BBB at 12x.

Investors should prioritize firms with cash flow resilience (e.g., EMS’ 26% operating margins) and secular tailwinds (e.g., TEO’s 5G expansion). While risks like tariffs and inflation linger, the undervalued nature of these stocks and their growth trajectories suggest they could outperform large-caps in 2025 and beyond.

Final Take: Asia and Latin America’s small-caps aren’t just undervalued—they’re undervalued and underfollowed. This combination creates a rare opportunity to capture asymmetric returns in 2025.

Data as of Q1 2025. Past performance does not guarantee future results.