The markets gave up gains in late trade on Monday. While the benchmark indices remained in a tight range, there have been several big movers in trade. Jefferies listed out three stocks with a ‘Buy’ recommendation. They see double-digit growth potential for these stocks, with as much as 27% upside in one of them.
Here is a detailed analysis of Jefferies’ valuation call and what’s driving the bullish recommendation –
Jefferies on TBO Tek: Big acquisition boost
TBO Tek was one of the big gainers in trade today, and Jefferies has initiated coverage with ‘Buy’ rating on the stock and a target price of Rs 1,800 per share. This implies 17% upside for the share price of TBO Tek. According to the brokerage house, the acquisition of Classic Vacations, a premium US-based luxury travel wholesaler, for $125 million strengthens TBO’s presence in the premium outbound market, especially in North America.
Jefferies pointed out that the “acquisition will give TBO access to the large travel market of US, especially the premium outbound travel segment. Classic Vacations would get access to TBO’s supply tech, TBO’s global supply and booking engine capability.”
Jefferies on Samvardhana Motherson: Strong manufacturing a big positive
Jefferies has a ‘Buy’ rating on Samvardhana Motherson too. They have a target price of Rs 110 per share, implying an upside of 16% for the stock. The Samvardhana Motherson share price, along with most auto sector stocks, has been buzzing in trade after the recent GST rate revamp.
Jefferies pointed out that though a weak global auto environment and tariff uncertainties continue to pose headwinds in the near-term, what stands out for them is the company’s “huge growth appetite and a strategic pivot from autos to broader manufacturing ambition spanning sectors including electronics & aerospace.” They like the company’s strong manufacturing capabilities and its expanding addressable market.
Jefferies on Hexaware: Growth supports valuation
Jefferies has initiated coverage on Hexaware as well with a Buy rating. They have a target price of Rs 930 a share. This implies an upside of 27% for the Hexaware share price. According to Jefferies, though the company’s “growth characteristics of a mid-sized IT firm”, the revenue mix and quality metrics are “rivalling large IT firms”.
According to the international brokerage house, “superior quality with healthy growth will support premium valuations.” They expect “strong client additions/mining, platform-led legacy modernization and expansion in new verticals/regions” to support “10% revenue growth and 15% EPS growth on an annualised basis between 2025-2027”