6 ‘Buy’ recommendation by JM Financial with up to 25% upside

 The brokerage retained its positive stance on the basis of quarterly earnings, annual reports and company developments.

It sees business momentum, earnings visibility and expansion continuing to support its preferred picks. 

Here is a look at the stocks that remain on JM Financial’s recommended list.

JM Financial on WeWork India Management: ‘Buy’

JM Financial maintained its ‘Buy’ rating on WeWork India Management with a target price of Rs 850, implying an upside potential of 25.2%. The brokerage said the company’s first quarter performance fell marginally short of its estimates because value added services income declined and seat additions were lower than expected during the quarter. 

Even so, it said the broader business outlook remained intact, backed by healthy contracted revenue, planned capacity additions and the gradual expansion of higher-margin ancillary businesses.

According to JM Financial, WeWork India reported revenue under Indian Generally Accepted Accounting Principles of Rs 687.3 crore in Q1FY27, up from Rs 537.9 crore in Q1FY26, while Earnings Before Interest, Taxes, Depreciation and Amortisation increased to Rs 127.6 crore from Rs 76.3 crore over the same period. Occupancy stood at 85%, while occupancy across the mature portfolio was 89%. The brokerage attributed the sequential moderation in revenue to lower value added services and digital products income, with seat additions during the quarter limited to 7,000 because of timing differences.

JM Financial said management intends to add 15,000 to 16,000 seats in the second quarter, including 7,000 managed seats that are already backed by demand. It therefore expects no further pressure on margins during the second quarter and believes profitability should improve progressively as fresh capacity becomes operational. 

The brokerage added that the company remains on course to add 28,000 seats during FY27, providing visibility for sustained business growth through the year.

JM Financial also said digital products, Rivet and member services are expected to become increasingly meaningful contributors to earnings because these businesses monetise the existing platform without requiring incremental capital expenditure. 

The brokerage expects WeWork India to deliver a 22% compound annual growth rate in revenue and a 24% compound annual growth rate in Earnings Before Interest, Taxes, Depreciation and Amortisation over FY26 to FY28, supported by continued seat additions and around 4% annual growth in average revenue per member.

 It maintained its valuation at 15 times FY28 estimated enterprise value to Earnings Before Interest, Taxes, Depreciation and Amortisation and reiterated its ‘Buy’ recommendation. 

JM Financial said, “Healthy locked-in revenue for the year along with new seats addition of 28k (for full year) and contribution from other revenue streams provides 20-25% growth visibility for FY27.”

JM Financial on JSW Steel: ‘Buy’

JM Financial reiterated its ‘Buy’ rating on JSW Steel with a target price of Rs 1,460, indicating an upside potential of 18%. The brokerage said the steelmaker delivered a stronger-than-expected operating performance during the first quarter of FY27, helped by improved steel realisations at JSW Vijayanagar Metallics and continued progress in reducing debt.

According to JM Financial, consolidated Earnings Before Interest, Taxes, Depreciation and Amortisation stood at Rs 9,380 crore in Q1FY27, exceeding its estimate of Rs 8,300 crore. Standalone Earnings Before Interest, Taxes, Depreciation and Amortisation came in at Rs 6,610 crore, supported by an increase in steel realisations of around Rs 5,100 per tonne over the previous quarter. Although standalone sales volumes declined to 5.24 million tonnes in Q1FY27 from the preceding quarter, operating profitability improved as Earnings Before Interest, Taxes, Depreciation and Amortisation per tonne increased to around Rs 12,600.

JM Financial said the company retained its FY27 guidance for consolidated production of 29.75 million tonnes and sales of 28.6 million tonnes, excluding JSW JFE Steel Ltd. It expects operating leverage to improve over the coming quarters as the upgraded blast furnace at Vijayanagar and facilities in Ohio ramp up production. 

While coking coal costs are expected to rise during the second quarter, the brokerage said lower iron ore prices and easing freight-related costs are likely to offer support.

The brokerage also pointed to a significant improvement in the balance sheet. Net debt declined to Rs 46,200 crore at the end of June 2026 from Rs 53,900 crore at the end of March 2026, following the second equity investment by JFE, which completed funding for the joint venture. 

JM Financial believes the stronger financial position, improving profitability at JSW Vijayanagar Metallics and the company’s multi-year capacity expansion programme provide a favourable earnings outlook. It therefore retained its ‘Buy’ recommendation. JM Financial said, “Strong deleveraging trajectory, realisation-led margin recovery at JVML, and a visible multi-year capacity pipeline augur well for the earnings trajectory.”

JM Financial on Axis Bank: ‘Buy’

JM Financial reiterated its ‘Buy’ rating on Axis Bank with a target price of Rs 1,575, implying an upside potential of 18.5%. The brokerage said the lender delivered a mixed set of numbers for the first quarter of FY27, with healthy loan and deposit growth offset by continued pressure on net interest margins.

 Even so, it believes the bank remains well placed because of its liability franchise, improving asset quality and expectations of an earnings recovery over the medium term.

According to JM Financial, advances increased 19% year on year in Q1FY27, led by 38% growth in large and mid corporate lending and 25% growth in small and medium enterprise loans, while retail advances excluding agriculture increased 5%. Deposits rose 18% year on year, supported by term deposits, although current account and savings account deposits declined sequentially. Net interest income increased 8% year on year, while profit after tax rose 23% year on year, helped by disciplined operating expenses and lower provisions.

JM Financial said net interest margins remained under pressure because of loan repricing, a higher share of wholesale loans and seasonal factors linked to agricultural lending. However, management continues to target a structural net interest margin of around 3.8% and believes the first quarter marked the bottom of the cycle. 

The brokerage also noted that asset quality remained stable, with credit costs contained at 71 basis points, while gross slippages moderated sharply compared with the corresponding quarter last year.

JM Financial expects improving funding costs, a more favourable asset mix and stable credit costs to support profitability over the next two financial years. It has therefore retained its earnings estimates and maintained the ‘Buy’ recommendation on the stock. 

JM Financial said, “While near-term NIM improvement remains a key monitorable, improving funding costs, a better asset mix and benign credit costs should drive earnings recovery over the medium term.”

JM Financial on ICICI Bank: ‘Buy’

JM Financial maintained its ‘Buy’ rating on ICICI Bank and raised its target price to Rs 1,710, indicating an upside potential of 18.4%. The brokerage said the bank once again delivered one of the strongest performances among large private sector lenders during the first quarter of FY27, supported by robust loan growth, stable margins, healthy fee income and lower provisions.

According to JM Financial, profit after tax increased to Rs 5,999.9 crore in FY27 estimate? Wait, no. In the reported quarter, profit after tax increased 16% year on year in Q1FY27, while net interest income rose 13% year on year. Loan growth accelerated to 20% year on year, driven by business banking, rural lending, mortgages and the overseas portfolio. Deposits increased 14% year on year, while the reported net interest margin expanded to 4.36% during the quarter.

The brokerage said fee income increased 23% year on year on the back of broad-based business growth, while provisions declined sharply, resulting in earnings exceeding its estimates. Asset quality remained stable despite a seasonal rise in gross slippages, as credit costs declined to 0.32%, helped by recoveries through the National Company Law Tribunal process.

JM Financial expects ICICI Bank to continue delivering sector-leading growth because of its strong balance sheet, disciplined margin management and healthy asset quality. It raised its earnings estimates for FY27 and FY28 by 2% to 5% and continues to regard the lender as its preferred banking stock. 

JM Financial said, “Given its sector-leading loan growth, better NIM management and strong asset quality trends, ICICI Bank shall continue to command a premium valuation among large banks in our view.”

JM Financial on Bajaj Finance: ‘Buy’

JM Financial reaffirmed its ‘Buy’ rating on Bajaj Finance and increased its target price to Rs 1,220, implying an upside potential of 15.5%. The brokerage said its assessment of the company’s FY26 annual report reinforced confidence in its long-term growth prospects, supported by a steady move towards secured lending, improving operating efficiency and wider adoption of Artificial Intelligence across business functions.

According to JM Financial, the share of secured loans increased to 62% in FY26 from 61% in FY25 for the consolidated business, while consumer durable finance continued to gain traction. Consumer durable loan volumes increased 20% in FY26 from FY25, disbursements rose 24%, assets under management grew 30%, and the company expanded its market share by 320 basis points. 

In emerging businesses, wheel loans, gold loans and microfinance also recorded strong growth, with assets under management increasing 40%, 115% and 75%, respectively, during FY26.

The brokerage also pointed to an improvement in fee income and operating efficiency. Core fee income increased 29% in FY26 from FY25, driven by higher distribution income, foreclosure income and service charges. Operating expenses continued to moderate, with the operating expense-to-average assets under management ratio improving to 3.8% in FY26 from 4.6% in FY23. 

JM Financial said management expects Artificial Intelligence-led automation to deliver a further reduction in operating expenses during FY27.

The brokerage noted that Artificial Intelligence has already begun contributing meaningfully to operations. Around 8% of personal loan disbursements were generated through Artificial Intelligence voice bots during FY26, while 32% of customer service emails were processed through Artificial Intelligence-powered customer relationship management agents. JM Financial believes these initiatives will strengthen productivity while supporting profitability over the coming years.

JM Financial said, “AI emerges as a key competitive differentiator. Early-use cases are already delivering tangible outcomes.”

JM Financial on Tips Music: ‘Buy’

JM Financial maintained its ‘Buy’ recommendation on Tips Music with a target price of Rs 810, indicating an upside potential of 21.1%. The brokerage reviewed the legal dispute involving producer Puja Entertainment over the use of two songs from Biwi No.1 and concluded that it does not expect any material impact on the company’s operations or earnings.

According to JM Financial, Puja Entertainment filed a suit seeking Rs 400 crore over the alleged unauthorised use of two songs and sought an additional Rs 100 crore in damages along with restrictions on the film’s release. However, the Bombay High Court ruled in favour of Tips on June 3, 2026, and the film was released as scheduled on June 5, 2026. The brokerage said the songs have been commercially exploited by Tips for about 25 years, with no injunction currently in force.

JM Financial added that disputes between producers and music labels over legacy catalogues have become more common as digital platforms have increased the commercial value of older music libraries. 

It pointed out that Indian courts have generally upheld the ownership of sound recordings acquired by music labels from producers, while litigation involving individual songs is unlikely to have a meaningful impact on companies with large catalogues.

The brokerage believes Tips Music remains well positioned because of its profitability, revenue growth guidance and multiple monetisation opportunities. It also said any potential financial exposure would relate only to the contribution of the disputed songs rather than the amount claimed in the lawsuit. JM Financial therefore retained its ‘Buy’ recommendation on the stock.

JM Financial said, “These disputes substantially reflect long-standing counterparties revisiting decades-old agreements now that digital has made catalogues visibly valuable rather than a systemic challenge to label title.”

Conclusion

JM Financial continues to favour companies with visible earnings growth, healthy balance sheets and identifiable business drivers despite near-term challenges in individual sectors. 

Among the six stocks, WeWork India Management offers the highest implied upside of 25.2%, followed by Tips Music at 21.1%, while ICICI Bank, Axis Bank, JSW Steel and Bajaj Finance also remain backed by the brokerage’s ‘Buy’ recommendations based on their respective business outlooks and financial performance.

Disclaimer: The stock recommendations, target prices, and earnings projections outlined in this article are based on research reports issued by third-party brokerages (such as Morgan Stanley and JM Financial) and are presented for informational and educational purposes only. They do not constitute direct buy, sell, or hold advice, nor do they represent an offer or solicitation to invest in any security. Equity and financial instrument investments carry inherent market risks, and target price projections or potential upside calculations are speculative and not guaranteed. Readers should perform their own due diligence and consult a SEBI-registered financial advisor before making any investment decisions.

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