The markets have seen another session of sharp sell-offs. The biggest question for most investors in this kind of situation is what stocks to bet on? JM Financial has updated coverage across three companies spanning auto ancillaries, industrial manufacturing and healthcare, each backed by earnings visibility and business-specific triggers.
The brokerage has assigned ‘Buy’ ratings on all three, with target prices implying upside ranging from 15% to nearly 25%. The calls are driven by niche positioning, order book strength and strategic expansion moves.
Here is a detailed analysis of the investment rationale behind the three stocks –
JM Financial on Balkrishna Industries: ‘Buy’
JM Financial has initiated coverage on Balkrishna Industries with a target price of Rs 2,540, implying an upside of around 25%.
The brokerage builds its case around the company’s strong grip over the global off highway tyre segment, where it operates in a niche market estimated at $15–18 billion. Balkrishna Industries has carved out a position through a wide product range and focus on replacement demand, which typically carries better margins. According to JM Financial, this positioning allows the company to maintain pricing discipline even against larger global peers.
The report notes that Balkrishna Industries has steadily expanded its reach to more than 160 countries while maintaining a cost advantage through integrated manufacturing. Growth visibility is tied to recovery in key export markets such as Europe and the United States, alongside steady domestic demand.
JM Financial also points to new business lines such as passenger vehicle and commercial vehicle tyres and carbon black as additional contributors to revenue over the next few years, though these may weigh slightly on margins in the near term.
“The company dominates the niche USD 15–18bn global OHT market by focusing on high-margin replacement demand through a massive portfolio of over 3,600 SKUs,” JM Financial said.
JM Financial on Aequs: ‘Buy’
JM Financial has initiated coverage on Aequs with a target price of Rs 145, suggesting an upside of 19%.
The brokerage’s view is anchored in Aequs’ position as a Tier I supplier to global aerospace companies such as Airbus and Boeing, along with its fully integrated manufacturing capabilities in India. The aerospace business already provides multi-year revenue visibility through a strong order book and long standing client relationships.
According to the report, the aerospace segment continues to be the primary earnings driver, supported by increasing sourcing from India by global aircraft manufacturers. JM Financial expects this trend to sustain growth over the medium term.
At the same time, the brokerage sees optional upside from the consumer segment, particularly after a recent contract win from a global electronics company for manufacturing components used in smart devices. The pace at which this business scales up remains a key monitorable.
“Aequs is a Tier I supplier for leading aerospace names and the only fully integrated supplier from India, with increased focus of these majors on India sourcing,” JM Financial said.
The report adds that the aerospace order book of about USD 814 million provides revenue visibility for the next three to four years, while the consumer segment offers longer term potential if execution improves.
JM Financial on Aurobindo Pharma: ‘Buy’
JM Financial has maintained its ‘Buy’ rating on Aurobindo Pharma with a revised target price of Rs 1,610, indicating an upside of 26%.
The brokerage’s positive stance follows the company’s planned acquisition of Lannett, a United States based generic drug manufacturer. The deal is expected to strengthen Aurobindo Pharma’s manufacturing footprint in the US and expand its portfolio, particularly in complex generics and controlled substances.
According to JM Financial, the acquisition brings both revenue and cost benefits. It adds a portfolio of around 70 products and a pipeline of respiratory and other complex generics, while also offering room to scale up production at Lannett’s underutilised facility.
“The transaction gives Aurobindo access to a late-stage pipeline, including respiratory generics such as generic Advair and Spiriva,” the brokerage said.
JM Financial expects the acquisition to contribute about USD 90 million to profit after tax by FY28 and has revised its earnings estimates upward accordingly.
The brokerage is also factoring in margin expansion driven by better capacity utilisation, product mix and entry into higher return segments such as biosimilars and specialty generics. Over FY26 to FY28, it expects revenue, operating profit and net profit to grow at a compounded pace of 17%, 21% and 26% respectively.
Conclusion
Across these three calls, JM Financial is leaning on business-specific strengths rather than broad sector themes. The upside projections vary, but the common thread across all three is earnings visibility backed by identifiable triggers over the next two to three years, according to the brokerage’s assessment..
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.