The markets have been trading in a tight range. Often the big dilemma is what stocks should one bet on in such a situation? International brokerage house Jefferies has come up with its list of Buy recommendations and they see as much as 47% upside potential in some of these counters.
Here is a look at the top Buy recommendation from Jefferies at this hour-
Jefferies on Eternal: Worst is over for food delivery business
Jefferies has called Eternal “neighbour’s envy, owner’s pride.” They have a Buy rating on the stock with a price target of Rs 400 per share. This implies an upside target of a whopping 47%. They see the current slowdown in the food delivery business as cyclical and believe that the “structural story is intact. Our medium-term industry growth expectation is, however, closer to 16-17% Vs 20% by Zomato management.” Unlike retailers, they expect that the return profile and cash generation in the food delivery business is “much better and quite comparable to staple firms (low capex & working capital) with a superior growth profile.”
In terms of the dynamics of the quick commerce business, they consider the industry to be “attractive for incumbents & new players. However, based on the dynamics so far, it does appear, as also highlighted by the management, that the worst is behind.”
Jefferies on Infosys: Strong deal bookings
Jefferies recommends Buy Infosys with a target of Rs 1,660 per share. This implies around 6% upside from current levels. According to the brokerage house, Infosys’ Q1FY26 revenues of $4.9 billion, up 2.6% QoQ, “beat our and consensus estimates. EBIT margins at 20.8%, down 15 bps QoQ, were broadly in line with estimates. ” Profits too “were ahead of estimates, mainly due to higher-than-expected revenues and other income,” they added.
The brokerage house highlighted that Infosys’ deal bookings were healthy at $3.8 billion, of which 55% was net new. However, hiring continues to be weak, with net additions of merely 210 people in Q1.
The management highlighted that improvement in realisations and seasonality has supported growth in Q1. Deals wins this quarter included one mega deal as well as deals focused on AI, vendor consolidation, and digital transformation.
Jefferies on Dalmia: Better realisation and lower cost
Another stock that Jefferies has a Buy on is Dalmia. They have a price target of Rs 2,600 on the share price of Dalmia and implies 15% upside from current levels. According to the brokerage house, the focus on “profitable growth was reflected in weak volumes during Q1. The 9% QoQ spike in realizations was on the basis of a surge in the South and a sustained uptick in East.” The management spoke of stable prices in July as well, and the company also firmed up expansion to 64 mtpa. Jefferies raised the EBITDA estimates by 5-9%.
According to Jefferies, “sustained volume outperformance Vs industry in FY25 and future years is driven by expansion plans in the eastern, western, and southern regions. The company has also laid out plans to be a pan-India pure-play cement company, targeting to grow capacity at 15% CAGR over the next decade to reach 110-130 million tonne.”
Jefferies on KEI: Export rise lends visibility for FY28
Jefferies has a Buy rating on KEI with a price target of Rs 4,855 per share.They have raised the target for the KEI share price, and this implies an upside of 22% for the share price from current levels. According to Jefferies, the company’s “efforts to enter US/Europe markets in the last 5 years is yielding results and export growth should offset concerns on competition entry in domestic markets.” According to them, “the perceived business impact of new competition will decline given the robust 3-year EPS growth.” The only downside risk, they pointed out, is the “sharp pricing competition in cables.”
They expect “KEI to continue to gain market share in retail.” According to them, “the rise in retail and export shares in revenue, which have 100-200 bps better margin profile.”
Jefferies on CMS Info: Operating synergies to improve profitability
Jefferies expects better “operating synergies to improve profitability” for CMS Info. They have Buy rating with a price target of Rs 580 per share. This implies an upside of 16% for the share price of CMS Info from current levels. They believe “M&A-led consolidation and diversification into newer/non-cash-driven businesses can drive rerating.” The key risks, as per the brokerage house, “can arise from rapid digitization of retail transactions and any adverse change in bank partnership terms.”
CMS Info Systems is one of India’s largest cash management companies based on the number of ATM points and the number of retail pickup points and offers its customers a wide range of tailored cash management and managed services solutions, including ATM network management, retail management, and managed services.