Incendiary 40mm grenades.
Fire damage instead of explosion. Less splash, higher damage.
Or maybe continuous damage like poison for a couple seconds?
Or you could make grenade launchers a support weapon
by adding stun, smoke and illumination grenades if that's possible.
Stun: Lose all AP if hit successfully. AP then regenerate normally. Small splash area (3 hexes).
Smoke: Lowers visibility (can only see 5 hexes in smoke) and adds sneak bonus in targeted area.
Illumination: Raises visibility of things in radius (you can see further) and adds sneak malus in targeted area.