As sentiment in the Indian stock market improves due to domestic tax reforms, a healthy macro outlook, large-cap valuations moving to more rational levels, expectations of an earnings revival, and signs of improving India–US trade relations, global financial firm Jefferies has revealed 25 top bottom-up stock ideas that investors can consider for the long term.
Bottom-up investment approach focuses first on the fundamentals of individual companies rather than on the broader economy or sector trends.
Top stocks to buy
Reliance Industries
Jefferies pointed out value discovery in FMCG, data centre and New Energy over FY27-28.
The brokerage firm expects Reliance to clock an 11 per cent consolidated EBITDA CAGR over FY25-28E.
“The stock appears to discount lower growth trading at -1 SD on long-term forward EV/EBITDA and imputing zero value to New Energy, data centre, etc. With improving visibility on double-digit consolidated EBITDA growth in FY26, we see the EV/EBITDA multiple ripe for inversion. At the current valuation, the multiple has inverted four times in the last five years. Our target price of ₹1,670 implies 21 per cent upside,” said Jefferies.
HDFC Bank
Jefferies said that while rate cuts will have an interim drag on HDFC Bank’s net interest margins (NIMs), an improving loan and funding mix, stable credit costs, and better cross-sells can aid core profits.
“We have factored in margin compression of nearly 30bps in FY26 and improvement thereafter. HDFC Bank is our top pick as we see better growth momentum and stable asset quality as positive re-rating catalysts,” said Jefferies.
“Valuations have rerated at 19 times FY26 PE/2.3 times FY26 adjusted PB, but the relative premium to well-run global banks has narrowed. We rate it as buy with a target price of ₹1,200, based on 2.5 times Sep-27 adjusted PB and value of stake in subs,” Jefferies said.
ICICI Bank
Jefferies believes ICICI Bank is well-placed to deliver on growth and quality. With healthy deposit growth and the lowest LDR among private banks, it can aid in higher credit growth than its peers.
“While rate cuts will have an interim drag on NIMs, a slower rise in discretionary costs (on branches/ staffing) can aid cost synergies and earnings growth. We have factored margins compression of nearly 25bps in FY26 and improvement thereafter,” said Jefferies.
“Valuations are deservedly at a premium to peers at 2.6 times FY26 adjusted PB and 17 times adjusted PE. ICICI Bank is among our top picks with a price target of ₹1,760, based on 2.7 times Sep-27 adjusted PB and value of stake in subs,” said Jefferies.
Max Financial Services
“We estimate APE (annualised premium equivalent) and VNB (value of new business) to grow at 15 per cent and 17 per cent CAGR, respectively, over FY25-28E with higher margins of nearly 150bps over the next three years,” said Jefferies.
“Valuations at 2.3 times P/EV FY26E and 15 times P/VNB FY26E are at a (10-30 per cent) discount to HDFC Life. We rate Max Financial stock as buy with a target price of ₹1,900, based on 2.1 times Sep-27 P/EV,” Jefferies said.
Bajaj Finance
Jefferies highlighted that Bajaj Finance’s asset quality trends are stabilising now. AUM (assets under management) growth guidance of 23-24 per cent is strong despite weaker bank credit growth at 10 per cent.
“With cut in tax rates (income and GST), Bajaj Finance is also a beneficiary from any pick-up in consumption spending. Valuation at 5.3 times FY26 PB is justified in the context of high growth and strong profitability. We see BAF to be one of the few large caps where earnings growth can be 20% + over the next few years, with nearly 20% ROE. It stays among our top NBFC picks with a target price of ₹1,100 based on 5 times Sep-27 PB,” said Jefferies.
Cholamandalam Investment and Finance
Jefferies believes Cholamandalam Finance can achieve over 25 per cent EPS CAGR and 19-20 per cent ROE over FY25-28E despite some headwinds to growth and asset quality in the near term.
“We believe a diversified vehicle portfolio and non-vehicle portfolio should support 21 per cent CAGR over FY25-28e. We believe Cholamandalam Finance’s margins should expand due to the recent cut in rates. Around 65 per cent of its assets are fixed, while 50 per cent of its liabilities are floating. With nearly 20-25 per cent of liabilities being EBLR-linked, the benefits of rate cuts will be more upfront versus peers,” said Jefferies.
The brokerage firm said soft demand and asset quality trends can weigh on stock prices in the near term, but from a 12-month perspective, they should offer an attractive entry point.
Mahindra & Mahindra
“We like M&M’s strong tractor and improving auto franchise, and with tractor in an upcycle as well as GST rate cut boosting industry volumes, we expect M&M to continue to deliver strong volume and earnings growth in the coming years,” said Jefferies.
We see M&M’s total volumes rising 12 per cent over FY25-28E, which should drive a 19 per cent CAGR in core EPS (excluding subsidiary dividends). Our FY26-28E EPS estimates are 7-12 per cent above street. Its core FY26E PE at 27 times is higher than its historical average of 14 times, but we see room for further valuation re-rating with improving franchise and tractor up-cycle ahead,” said the brokerage firm.
TVS Motors
Jefferies expects TVS Motors’ EPS to grow at a 27 per cent CAGR over FY25-28E.
“Our FY26-28E EPS estimates are 8-22 per cent above street. TVS’ 47 times FY26E PE appears rich (10-year average: 32 times), but we believe premium multiples will sustain on a strong growth outlook,” said Jefferies.
Jindal Stainless
Jefferies pointed out that Jindal Stainless is India’s largest stainless steel producer, with a nearly 40 per cent market share. India is among the fastest-growing major markets for stainless steel, with a growth rate nearly twice that of the global average in the last five years.
“The country’s per-capita stainless steel consumption is still nearly 50 per cent of the global average and just 15-30 per cent of the US and China, providing large headroom for long-term growth. Jindal Stainless, being a market leader, should be a key beneficiary of this growth,” said Jefferies.
“We expect Jindal Stainless to deliver 10 per cent volume CAGR, which, along with some margin recovery, should drive 15 per cent EBITDA and 20 per cent EPS CAGR over FY25-28E. We also see its balance sheet turning net cash by FY28E,” Jefferies said.
“Our target price of ₹900 is based on 12 times FY27E EV/EBITDA, which is at a premium to Tata Steel and JSW Steel; the last 10-year average premium of European stainless steel stocks over their carbon steel peers is nearly 25 per cent,” said Jefferies.
Siemens Energy India
Jefferies expects Siemens Energy to see a 50 per cent EPS CAGR over Sept 24-27E, driven by operating leverage-linked margin accretion and the robust power capex pipeline.
“Our target price of ₹4,000 values Siemens Energy at 60 times PE Sept 27E given the strong 50 per cent EPS CAGR over Sept 24-27E,” said Jefferies.
Hindustan Aeronautics (HAL)
Jefferies underscored that Hindustan Aeronautics (HAL) is India’s leader in air force defence equipment. JV agreements with global stalwarts like GE and Safran put it in a position to transform itself into a leading defence OEM.
“High margin service income and aircraft deliveries should drive double-digit revenue growth for three to five years. 8-10 per cent revenue FY26 guidance looks conservative. ₹1.89 lakh crore order book (6.1 times FY25 revenues) and ₹2.5 lakh crore pipeline provides FY26E-30E revenue visibility. Our target price of ₹6,220 values the company at 35 times PE Sept 27E, which is 20 per cent below its peak multiple,” Jefferies said.
JSW Energy
According to Jefferies, JSW Energy plans to reach 30 GW capacity by 2030, including acquisitions, versus the 20 GW target set in FY24.
“The company offers a good blend of steady return projects and higher cash flow generation. We forecast 23 per cent EPS CAGR in FY25-28E. Our ₹700 target price values the stock at 14 times EV/EBITDA Sept 27E, close to the lower end of the 15-20 times range it traded at post 2010 listing when capacity was visibly rising 2 times, to factor in the acquisitions and perceived risk on a higher net debt-to-equity ratio,” said Jefferies.
Adani Ports
Jefferies expects Adani Ports to see 17 per cent capacity addition over FY25-27E, driving 15 per cent CAGR in volumes and 19 per cent EBITDA CAGR in the period.
“We estimate 15 per cent FY25-30E EBITDA CAGR, led by 11 per cent CAGR in volumes. Our ₹1,815 target price is based on 17 times Jun’27E EV/EBITDA, broadly in line with 16 times historical average. Stock at 14 times 12-month forward EV/EBITDA is attractive,” said Jefferies.
Navin Fluorine
“Navin Fluorine stock is down from its recent peak despite a strong Q1 beat and trades in line with long-term average forward PE. We project 36 per cent EPS CAGR over FY25-28. Strong pipeline in spec chem, CDMO and HPP should fructify in FY26/27, providing growth visibility for FY28 onward. Our target price of ₹6,025, at 45 times Sep-26 forward PE, implies 26 per cent upside,” said Jefferies.
Lodha Developers
Jefferies pointed out that Macrotech (Lodha) is India’s largest listed developer by land bank, with 600m sf+ development potential, and the largest residential developer by pre-sales in Mumbai. The company enjoys an almost even mix of premium and affordable housing segments.
“The large land bank in Eastern Mumbai suburbs is set to benefit from a large US$70bn infrastructure upgrade. The New Mumbai International Airport and construction of multiple metro lines and high-speed rail in the years ahead are triggers,” said the brokerage firm.
Jubilant Foodworks
“Jubilant Foodworks has reported consistent double-digit SSS growth over the last three quarters. much ahead of its peers. While part of this is attributed to a low base, also seen in the case of peers, we think self-help measures also helped. In fact, Jubilant Foodworks’s delivery segment grew much ahead of food platforms (nearly 17 per cent for Zomato/ Swiggy),” said Jefferies.
“Our target price of ₹1,000 implies a 48 times Sep’27e forward EV/EBITDA for the standalone business, which is in line with discretionary peers growing at a similar pace,” the brokerage firm said.
AWL Agri Business
Jefferies pointed out that AWL is India’s largest branded edible oil franchise with a fast-growing staple foods portfolio. Its flagship brand, Fortune, is one of India’s largest FMCG brands with ₹25,000 crore+ sales. AWL is set to see a change in ownership, with Wilmar set to take over from the Adani group.
“Over a five-year period, we expect EPS to double, led by steady oil business and profit accretion in the foods business. As the business mix shifts more towards foods, we also see an opportunity for the stock to re-rate,” said Jefferies.
Coforge
“We expect margins to cross 14 per cent in FY27 versus Coforge’s target of 14 per cent margins in FY26. We expect Coforge to deliver 23 per cent EPS CAGR over FY26-28, driven by strong top-line growth and improvement in operating margins,” said Jefferies.
“Coforge trades at 37 times one-year forward PE and 1.6 times on a PEG basis. Consistent execution and a strong growth outlook should support current valuations. We have a buy rating on Coforge with a target price of ₹2,030 at 34 times PE,” said Jefferies.
Sun Pharma
“Sun Pharma’s business offers high-teens earnings growth over FY26-28E with high predictability and certainty. We value Sun at 33 times Sep-27E EPS with a target price of ₹2,070 as the company is most immune to generic price erosion in our coverage,” said Jefferies.
Mankind Pharma
Jefferies highlighted that Mankind is the fourth largest player in the Indian pharmaceutical market and the only name in Indian pharmaceuticals with more than 80 per cent of sales coming from India.
“Mankind has been ramping up its chronic contribution and has increased it by 350bps+ in the past three years to nearly 40 per cent. We believe the division will continue to drive superior growth, resulting in market-leading sales growth numbers for the company,” said Jefferies.
“OTC channel restructuring has been completed, and the vertical is back on a growth path of double-digit growth. We value Mankind EV at 28 times Sep’27E EBITDA with a target price of ₹3,100,” said the brokerage firm.
UltraTech Cement
“We value the stock at 20 times Sep-27 consolidated EV/EBITDA to arrive at a target price of ₹14,700. We expect UltraTech stock to continue to outperform the sector, given its improving ROE/ROCE outlook, growing market share, and ramp-up of recently acquired entities. Improving trend in Industry pricing bodes well for profitability rebound in FY26,” said Jefferies.
Amber Enterprises
“We estimate sales and PAT CAGR of +28 per cent and +48 per cent, respectively, over FY25-28e and rate Amber as a buy with a target price of ₹9,450. Key drivers for the company are lower RAC penetration (India AC penetration at 7-8 per cent versus global average 30 per cent), incremental diversification and faster growth into margin-accretive components, new capex, client adds and strategic partnerships,” said Jefferies.
Bharti Airtel
“Bharti is the best way to play consumption in India as it operates in a category with similar penetration but larger market size and much lower competition versus other key categories,” said Jefferies.
“Over FY25-28, we expect Bharti Airtel to deliver a 17 per cent and 19 per cent CAGR in India mobile revenues and EBITDA, respectively, assuming three tariff hikes (10 per cent each) in FY26/27/28. Strong growth and falling capex intensity will drive a 22 per cent CAGR FCF and a 75 per cent rise in ROCE by FY28. We have a buy rating on Bharti with a target price of ₹2,500, implying 12 times EV/EBITDA,” said Jefferies.
InterGlobe Aviation (IndiGo)
“Despite the recent slowdown in domestic air passenger growth, IndiGo remains in the driver’s seat. Accelerated international expansion provides a strong lever for incremental growth, crude remains largely benign, and the recent grounding of aircraft is expected to ease cost pressures. We value the stock at 11 times EV/EBITDA, with a target price of ₹6,925,” said Jefferies.
GMR Airports
Jefferies expects airport traffic to increase at a CAGR of 10 per cent over FY25-FY28e.
“We expect GMR Airports’ EBITDA to rise by 26 per cent CAGR over FY25-FY28e, benefiting from recent tariff revision. We value the stock on an SOTP basis at ₹108 per share,” said Jefferies.
Read all market-related news here
Read more stories by Nishant Kumar
Disclaimer: The promoters of HT Media Ltd, which publishes Mint, and Jubilant Foodworks are closely related. There are, however, no promoter cross-holdings.
This story is for educational purposes only. The views and recommendations expressed are those of the broking firm, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
