The markets have been cautious lately. If you are wondering what stocks to invest in, here are some recommendations by Jefferies. The international brokerage has issued bullish updates for HCL Technologies and Emmvee Photovoltaic Power, driven by sector-leading growth and solar expansion potential. It has retained a ‘Hold’ rating on Avenue Supermarts, highlighting a moderation in revenue growth and an upcoming CEO transition despite an impressive expansion in EBITDA margins.
Jefferies on HCL Technologies
Jefferies has raised the target price on HCL Technologies to Rs 1,885 from Rs 1,850. The new target price implies an upside of 13% from the current market price. The brokerage firm has maintained its ‘Buy’ rating on the stock.
HCL Technologies’ Q3 results beat estimates, with higher revenue growth and strong deal wins as the main highlights. HCLTech raised FY26 services growth guidance to 4.75-5.25% – the highest among India’s Top 5 IT firms.
HCLTech’s infrastructure services lineage and AI strategy position it well to gain market share. Jefferis raised EPS estimates by 1-2% and expects a 10% EPS CAGR in FY26-28. Superior growth and FCF conversion will support premium valuations.
“We raise our revenue estimates by up to 2-3% to factor in acquisitions and higher organic growth, and expect HCLTech to deliver a 6% YoYcc CAGR in FY26-28,” said the brokerage.
Jefferies on Emmvee Photovoltaic Power
Jefferies maintained its Buy rating on Emmvee Photovoltaic Power, with a target price of Rs 320 on the stock. This implies that the brokerage house expects the stock to deliver more than 70% returns over the next 12 months, as it estimates that the stock is trading at a 50% discount to peers.
India’s solar installations are set to grow at a 24% CAGR over FY25-FY28. Emmvee’s early entry in TOPCon, superior DCR-driven profitability and adequately-funded balance sheet are a competitive edge. Industry profitability should normalise FY28 onward, but the brokerage firm expects high-teens steady state RoCE. “We project 56% EBITDA CAGR over FY25-28 and price Emmvee at 9x fwd EV/EBITDA,” said Jefferies.
Indian Photo Voltaic (PV) cell/module capacity is projected to reach 151GW/217GW by FY28, exceeding the domestic demand estimate of 65GWdc. Jefferies expects margins to settle in the early 20s (vs 30% currently) as significant existing capacity is subscale, MNRE’s move to increase threshold efficiency for ALMM could render 30GW capacity obsolete, and the capital intensity of backward integration will limit serious players.
Jefferies on Avenue Supermarts
Jefferies maintained its ‘Hold’ rating on Avenue Supermarts, with a target price of Rs 4,050, which looks at an upside of 6% from the current market price. DMart continued to witness a moderation in revenue growth with Like-For-Like at 5.6% – portfolio mix broadly stayed stable. Despite these factors, EBITDA margins expanded smartly to a multi-quarter high and drove the earnings surprise as EBITDA grew 20% YoY.
Store additions remain steady, with Q4 likely to see lumpy expansion. DMart added 10 stores in Q3 (taking the total store count to 442). The company is set to see a CEO transition in the March quarter. Management expects a limited impact from the new labour codes. The brokerage said that disclosures continue to be an issue.