The domestic brokerage house JM Financial has picked 3 high-conviction stocks, signalling significant upside potential across diverse sectors driven by structural growth narratives. The firm has reiterated ‘Buy’ ratings on Eternal (Zomato) and Dr Reddy’s Laboratories, while maintaining ‘Add’ rating on Mahindra & Mahindra.
Here is a detailed analysis of why the brokerage chose these stocks.
JM Financial on Dr Reddy’s Laboratories: Stock looks attractive
The brokerage has a ‘Buy’ rating on Dr Reddy’s Laboratories, with a target price of Rs 1,522, implying an upside of over 22% from the current levels. The brokerage expects that the future growth will be driven by double-digit expansion in ex-US markets from the NRT (Nicotine Replacement Therapy) business, biosimilar launches in the EU, and strong India growth.
Additional upside is expected from gSemaglutide pen sales (12 million in CY26) and pipeline products like Abatacept. However, lower gRevlimid sales may weigh post-FY26, although the company is well positioned to benefit from the upcoming generic GLP-1 wave.
JM Financial on Mahindra & Mahindra: Strong positioning in Automotive and Farm Equipment
The brokerage house retained its ‘Add’ rating with a target price of Rs 4,032 on Mahindra & Mahindra, implying an upside of 8.5% from the latest market price. The management highlighted strong positioning across its two core businesses – Automotive and Farm Equipment. In Auto, M&M targets 8x revenue growth by FY30 (20% CAGR over FY25-30), driven by advanced platforms, global expansion via the Pik-Up platform, and an SUV portfolio up cycle, including EV launches.
Further, the company aims to triple farm revenue by FY30 through domestic leadership, international scaling (US, Brazil, ASEAN), farm machinery expansion, and tech-led solutions in electrification, autonomy, and precision farming, with domestic industry CAGR guidance raised to 9% for FY25–FY30 from 7% earlier.
JM Financial on Eternal (Zomato): Blinkit has more room for growth
The brokerage house has maintained its ‘Buy’ call on Eternal (Zomato), with a target price of Rs 450, which implies an upside of 50% from the current market price. Akshant Goyal, CFO of Eternal, said Blinkit (50% share of B2C NOV) remains the primary growth engine for Eternal, as there is enough scope for the shift in consumer purchases from traditional ecommerce and offline commerce to quick commerce across tier 1/2+ cities.
The management indicated that 5-6% sustainable margin guidance (over the long term) is achievable, as there is significant room for brand and customer monetisation.