If you are wondering which stocks to pick in the current market environment, Jefferies has reiterated ‘Buy’ ratings on 3 stocks after the Q3 results. These include HDB Financial Services, HDFC Asset Management Company, and Infosys after their December quarter results came in ahead of estimates across all three companies.
The positive view is driven by stronger profit delivery, improving margins, stable asset quality trends in lending, steady flows in asset management, and large deal additions in IT services, according to Jefferies’ latest reports. Jefferies sees as much as 22% upside potential in select stocks.
Jefferies on HDB Financial Services: ‘Buy’
Jefferies has retained a ‘Buy’ rating on HDB Financial Services with a base-case target price of Rs 920, which implies about 20% upside. Jefferies said the December quarter profit rose 36% year-on-year to Rs 640 crore, exceeding estimates due to lower provisions and higher fee income, while profit growth stood at 45% after excluding a one-off provision linked to the new labour code.
Assets under management increased 12% year-on-year to Rs 11.49 lakh crore, while disbursements grew 10%, led by consumer and enterprise lending. Net interest margins improved 14 basis points quarter-on-quarter to 8.1%, supported by stable funding costs. Asset quality trends improved with gross stage-3 assets stable at 2.8% and a sequential decline in stage-2 assets, while credit costs came in below estimates.
Jefferies expects AUM growth to improve to 16% in FY27, with lower credit costs supporting earnings growth of 29% CAGR over FY26–FY28 and return on equity improving to around 16%.
“With disbursement gaining traction and asset quality trends stabilising, earnings trajectory should improve,” Jefferies said.
Jefferies on HDFC Asset Management Company: ‘Buy’
Jefferies has maintained a ‘Buy’ rating on HDFC Asset Management Company with a base-case target price of Rs 3,120, implying around 22% upside, Jefferies said. December quarter profit rose 20% year-on-year to Rs 769 crore, coming in slightly ahead of estimates, supported by higher other income and controlled costs.
Average assets under management grew 19% year-on-year to Rs 9.21 lakh crore, led by a 20% rise in equity AUM, which now forms 67% of total AUM. Core revenue grew 15% year-on-year, while blended yields remained steady at 46 basis points, even as employee costs increased due to ESOP-related expenses.
Market share remained stable in equity and debt funds, while liquid fund share declined, which affected yields. Jefferies expects 20% AUM CAGR over FY26–FY28, led by equity inflows, with profit growth supported by operating leverage and cost discipline.
“The impact of the new TER rules should be low to manageable and can be mitigated through a combination of pass-through and cost controls,” Jefferies said.
Jefferies on Infosys: ‘Buy’
Jefferies has reiterated a ‘Buy’ rating on Infosys with a base-case target price of Rs 1,880, which implies nearly 17% upside, Jefferies said Infosys reported December quarter revenue of $5.1 billion, up 0.6% quarter-on-quarter in constant currency, exceeding estimates and supported by large deal wins worth $4.7 billion, including a major NHS contract.
Adjusted EBIT margins improved 20 basis points quarter-on-quarter to 21.2%, while normalised profit rose 12% year-on-year to Rs 7,625 crore, aided by higher other income and a lower tax rate.
Management raised FY26 constant-currency revenue growth guidance to 3.0–3.5%, which Jefferies said mainly reflects the December quarter performance rather than stronger near-term demand. The brokerage expects Infosys to deliver 5.4% constant-currency revenue CAGR over FY26–FY28, with margins holding near 21%, supporting 7.5% recurring EPS CAGR.
“The guidance revision appears driven by the December quarter beat rather than a stronger March quarter outlook,” Jefferies said.
Conclusion
Jefferies’ latest reports point to steady earnings delivery across lending, asset management, and IT services, supported by improving margins, controlled costs, and defined growth drivers. Based on its updated estimates and valuation assumptions, the brokerage continues to see meaningful return potential across all three stocks under its base and higher return cases.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.