JM Financial issued a high-conviction ‘Buy’ signal for select Indian companies. These include Larsen & Toubro, Just Dial, ICICI Lombard General Insurance Company and ICICI Prudential Life, forecasting double-digit upside potential of up to 34% in select stocks despite recent quarterly headwinds.
The brokerage firm’s latest research reports indicate that while global uncertainties in Kuwait and rising operational costs have caused short-term volatility, the underlying business fundamentals and valuation multiples remain attractive for long-term investors.
JM Financial on Larsen & Toubro: ‘Buy’
JM Financial has maintained its ‘Buy’ rating on Larsen & Toubro with an unchanged target price of Rs 4,500, which offers a potential upside of approximately 34% from the recent market price.
The firm notes that “Kuwait is mulling cancellation of tenders worth $8.7bn (approx. Rs 73,080 Crore) in upstream oil & gas tenders, citing high bids vs. their budgets,” which has led them to cut core order inflow estimates by 5-6% for the financial years 2026 to 2028.
However, the brokerage firm believes the stock’s recent 3% fall largely factors in this delay and they “still expect L&T to meet its FY26 order inflow growth guidance of 10% YoY” due to strong prospects in the final quarter.
JM Financial on Just Dial: ‘Buy’
JM Financial has a ‘Buy’ rating on Just Dial with a target price of Rs 1,060, representing a potential upside of 11.5%. While collections grew by 8.1% in the third quarter, which is a positive sign for future revenue, the firm observed that “traffic trends were weak at -3.5% YoY during the quarter despite higher A&P spends.”
The brokerage firm analysis points out that the stock continues to be held back by one major factor: “the absence of clarity on the company’s cash distribution policy remains an overhang on stock performance despite inexpensive valuation,” especially since cash and investments now account for more than 90% of Just Dial’s market cap.
JM Financial on ICICI Lombard General Insurance: ‘Buy’
JM Financial maintains its ‘Buy’ rating on ICICI Lombard with a target price of Rs 2,333, implying an upside of 19.5%.
The insurer reported a profit after tax of Rs 660 Crore, which was 12% below the firm’s expectations due to higher costs, including “a one-off provision of Rs 55 Crore for the new Wage Code.”
Despite the soft quarterly results, the brokerage firm found that the core business remains healthy, noting that “what stood out was the consistent 80%+ growth in retail health, on a 1/n as well as like-to-like basis,” which supports their long-term positive view on the stock.
JM Financial on ICICI Prudential Life Insurance: ‘Buy’
JM Financial has reiterated its ‘Buy’ rating on ICICI Prudential Life Insurance Company with a target price of Rs 880, suggesting an upside of 17%.
The company reported a strong Value of New Business (VNB) of Rs 620 Crore, and the firm believes the “current valuations of 1.4x Mar 28 EV look undemanding” for investors.
Although growth was soft in December, the analysis by the brokerage firm highlights that “Annual Premium Equivalent (APE) grew 4% after 3 quarters of contraction,” and they expect a strong 23% growth in the fourth quarter, leading to a consistent 16% compounding of new business value over the coming years.
Conclusion
The analysis from JM Financial suggests that while external factors like Kuwaiti tender cancellations or internal cost provisions may cause short-term ripples, the long-term growth story for these market leaders remains intact. With double-digit upside potential across all four stocks, the firm continues to see value in these positions despite the mixed quarterly signals.
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.