5 ‘Buy’ recommendations by Jefferies, with up to 61% upside potential

Jefferies said improving margins, stronger order books, rising market share and disciplined execution supported its optimism on several counters despite concerns around geopolitics, commodity inflation and regulatory uncertainty. The brokerage sees upside potential ranging from 15% to 61% from prevailing market prices based on its revised target prices.

Jefferies on Larsen & Toubro: ‘Buy’

Jefferies retained its ‘Buy’ call on Larsen & Toubro and increased the target price to Rs4,885 from Rs4,500, indicating a possible upside of 19% from current levels. The brokerage said the engineering and infrastructure major continued to offer strong long-term growth visibility even though March quarter execution was affected by the US-Iran-Israel conflict. 

Jefferies noted that March quarter earnings before interest, tax, depreciation and amortisation missed estimates by 5% largely because engineering and construction revenue growth slowed amid geopolitical disruptions. Even so, Larsen & Toubro unveiled its Lakshya 2031 strategy, which targets 10% to 12% compound annual growth in order inflows and 12% to 15% compound annual growth in revenue through FY31. 

The company also plans sizeable investments in data centres, semiconductors and electronics manufacturing. Jefferies highlighted that Larsen & Toubro’s order book stood at Rs7,40,327 crore after rising 28% year-on-year, giving revenue visibility for the next several years. The brokerage expects core engineering and construction earnings before interest, tax, depreciation and amortisation to rise at a 19% to 20% compound annual growth rate during FY26 to FY28.

“L&T unveiled its Lakshya 2031 plan, after beating its Lakshya 2026 plan on revenue and order flow CAGR,” Jefferies said.

Jefferies added that the company’s execution track record and improving return ratios supported the valuation case. The brokerage pointed out that return on equity improved to 17% in FY26 from 10% in FY21, while working capital discipline also strengthened sharply during the year.

Jefferies on Polycab: ‘Buy’

Jefferies reiterated its ‘Buy’ recommendation on Polycab. The brokerage has raised the target price to Rs 9,770 from Rs 8,950. This implies an upside potential of 17% from current levels. The brokerage said the company continued to post strong growth despite disruption in Middle East operations during March. According to Jefferies, Polycab’s March quarter revenue grew 27% year-on-year, while full-year profit increased 32%. 

The brokerage said organised market share in the cables and wires business expanded by 400 basis points year-on-year to 30% to 31%, strengthening Polycab’s position as the market leader. Domestic cables and wires sales rose 30% year-on-year during the quarter, supported by market share gains and price hikes linked to copper costs. Jefferies also expects the fast-moving electrical goods business to become a stronger earnings contributor after sustaining positive earnings before interest and tax for five consecutive quarters. The brokerage estimates Polycab’s profit after tax will grow at a 21% compound annual growth rate between FY26 and FY29.

“Despite Middle East disruption in Mar26, Polycab posted strong sales at +27%YoY,” Jefferies said in the report.

The brokerage further noted that defence and data centres could emerge as important demand drivers for the company’s cables business in the coming years. Jefferies also highlighted that the company strengthened its net cash position to Rs4,200 crore from Rs2,500 crore a year earlier after improving cash flow management.

Jefferies on PB Fintech: ‘Buy’

Jefferies retained its ‘Buy’ rating on PB Fintech and revised the target price upward to Rs1,950 from Rs1,800. The revised target implies a 15% upside from current levels. The brokerage said the company delivered a better-than-expected March quarter operating performance, helped by strong growth in health and term insurance. Adjusted earnings before interest, tax, depreciation and amortisation came in 17% ahead of Jefferies estimates. 

Core insurance premium growth accelerated to 44% year-on-year in the March quarter, while health and term insurance business expanded 67% from a year earlier. Jefferies also pointed to improving renewal take rates under the company’s “Combined Operating” model and said the company continued to widen its point-of-sale person network aggressively. Smaller agents now account for 83% of the network compared with 50% earlier. The brokerage raised its FY27 and FY28 profit estimates by 4% to 6% after incorporating stronger premium growth assumptions.

“The key positives were strong fresh business growth in health and term insurance and renewal take rate rising due to ‘Combined Operating’ model,” Jefferies said.

Jefferies acknowledged that regulatory uncertainty around commissions remains a risk, though it said PB Fintech appeared well placed to cushion the impact through underwriting-linked arrangements with insurers and better operating leverage. The brokerage also said Policybazaar’s dominant market position and rising profitability justified premium valuations.

Jefferies on Coforge: ‘Buy’

Jefferies maintained its ‘Buy’ rating on Coforge and raised the target price to Rs1,860 from Rs1,620, implying a potential upside of 61% from current levels. The brokerage said the information technology company delivered a strong March quarter performance led by margin expansion and better free cash flow conversion. Coforge’s March quarter revenue rose 2% quarter-on-quarter in constant currency terms, while earnings before interest and tax margin expanded to 16.6%, up 230 basis points sequentially. 

Jefferies also raised its earnings estimates for financial years 2027 and 2028 by 9% to 11% after factoring in a stronger profitability outlook. The brokerage expects Coforge to deliver a 23% compound annual growth rate in recurring earnings per share between FY27 and FY29. It also pointed to strong deal momentum, with the company signing 21 large deals in FY26 against 14 in FY25, while the executable order book grew 16% year-on-year. Jefferies believes that gives Coforge enough revenue visibility to sustain double-digit organic growth despite the discontinuation of low-margin India operations.

“Strong deal wins and 16% YoY growth in executable order book provide visibility for double-digit organic growth despite clean-up of low-margin India portfolio,” Jefferies said in its report on Coforge.

The brokerage also said Coforge’s improving earnings quality and stronger free cash flow generation could support a re-rating in valuations over the medium term. According to Jefferies, artificial intelligence-led cost savings, delivery optimisation and portfolio clean-up are likely to aid margin expansion further over the next two financial years.

Jefferies on Punjab National Bank: ‘Buy’

Jefferies maintained its ‘Buy’ call on Punjab National Bank while revising the target price slightly lower to Rs130 from Rs134. Even after the reduction, the target price implied an upside of 20%. The brokerage said Punjab National Bank’s March quarter profit came in ahead of expectations as lower operating expenses and provision write-backs compensated for weak net interest income growth. 

Net profit rose to Rs5,200 crore in the March quarter from Rs4,560 crore a year earlier, supported by a reversal in retirement benefit provisions and lower credit costs. Loan growth accelerated to 14% year-on-year from 12% in the December quarter, led by overseas and micro, small and medium enterprises lending. Jefferies also noted that the bank’s gross slippages declined 8% year-on-year and core credit costs remained under control at 0.3% during the quarter. The brokerage expects Punjab National Bank to deliver a 12% compound annual growth rate in loans during FY26 to FY29.

“Headroom in LDR allows PNB to grow loans despite soft deposit growth of 9%,” Jefferies said in its note.

Jefferies added that the bank’s valuation remained inexpensive at 0.8 times FY27 adjusted book value and about eight times projected FY27 earnings, limiting downside risk despite margin pressure from lower interest rates.

Conclusion

The March quarter earnings season prompted Jefferies to stay constructive on several Indian stocks where execution stayed firm despite sector-specific hurdles. Across these reports, Jefferies pointed to earnings visibility, disciplined expansion and improving profitability as the main reasons behind its positive stance.

Disclaimer: The investment targets and ratings discussed represent the views of a third-party brokerage and are provided for informational purposes only. These do not constitute a formal offer, solicitation, or recommendation by this publication to buy, sell, or hold any security. Given the specific upside claims and price targets mentioned, readers are strongly advised to consult a SEBI-registered investment advisor before making any financial decisions, as market conditions and individual risk profiles vary.

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