Aim Routine care of low birthweight (LBW) neonates relies on incubators for stabilisation. An earlier study suggested that skin‐to‐skin contact achieves better physiological stability in the transition period when compared to incubator care. The aim of this study was to replicate that study with a larger sample. Methods A randomised controlled trial with LBW infants (1500–2500 g) randomised at birth, 50 to routine care and 50 to skin‐to‐skin contact, with stabilisation using the Stability of Cardio‐Respiratory system in Preterms (SCRIP) score measured repeatedly over the first six hours of life as the primary outcome. Results Newly born infants in skin‐to‐skin contact showed better transition to extra‐uterine life (p < 0.02), with the SCRIP score at 360 minutes in skin‐to‐skin contact being 5.82 (SD 0.66) and in maternal infant separation 5.24 (SD 0.72), p < 0.0001. In extended skin‐to‐skin contact care, infants had significantly less need for respiratory support, intravenous fluids and antibiotic use during the remainder of the hospital stay. Conclusion Skin‐to‐skin contact was likely to be an optimal environment for neonates without life‐threatening conditions who weighed 1500–2500 g at birth. By preventing instability that requires subsequent medical treatment, it may be life‐saving in low‐income countries.