THE SEAMLESS LINK
The consensus 'Buy' ratings from JM Financial on a diverse set of Indian companies underscore a strategic view that growth opportunities are not confined to a single sector. For Infosys, the narrative centers on the transformative potential of Artificial Intelligence, while Tenneco Clean Air India, Navin Fluorine International, and Ahluwalia Contracts present distinct opportunities in automotive components, specialty chemicals, and infrastructure development, respectively. These calls, issued in mid-February 2026, signal a belief in company-specific execution capable of overcoming broader market or sector challenges.
The Core Catalyst: Beyond Analyst Targets
JM Financial's conviction is rooted in quantifiable growth drivers. For Infosys, the firm anticipates Artificial Intelligence to be a "structurally expansionary" force, capable of offsetting AI-led deflationary pressures and tapping into an estimated $300-400 billion AI services opportunity by 2030. AI revenues constituted 5.5% of Infosys's top line in Q3 2026, with management projecting significant growth. The IT services sector, including peers like TCS and Wipro, is navigating strong demand for digital transformation and cloud services, though competitive pressures persist.
Tenneco Clean Air India’s valuation appeal is supported by an EBITDA margin expansion to 18.6% in 3QFY26, driven by operational efficiencies and premiumization. Consolidated Value Added Revenue (VAR) surged 14.7% year-on-year. The company secured new programs with significant revenue potential and maintains a robust order book expected to drive double-digit compound annual growth rates through FY28E, reflecting positive trends in the Indian auto component sector which is seeing increased localization and demand for advanced technologies.
Navin Fluorine International is positioned for earnings upgrades, potentially 15-20%, due to accelerated Contract Development and Manufacturing (CDMO) operations and scale-up of Project Nectar. JM Financial forecasts an incremental EBITDA of INR 400-410 crore by FY28E over its current run-rate, pushing total EBITDA towards INR 1,630-1,640 crore. The specialty chemicals sector, where Navin Fluorine operates, is a high-growth area in India, benefiting from global supply chain realignments and domestic manufacturing push, though competition from players like Gujarat Fluorochemicals is intense.
Ahluwalia Contracts (India) Ltd’s 'Buy' rating is underpinned by a substantial order backlog of INR 18,700 crore, equating to 4.2 times trailing twelve-month revenue. While 3QFY26 PAT missed estimates due to execution impacts from GRAP Stage 4 restrictions in the NCR region, revenue grew 11% year-on-year, and EBITDA margins improved to 9.2%. The construction sector faces cyclical challenges, including regulatory impacts like GRAP, but sustained government infrastructure spending and a strong order pipeline provide visibility for companies like Ahluwalia Contracts and its peers, such as L&T and PNC Infratech.
The Analytical Deep Dive: Valuations and Sector Context
Infosys, as of mid-February 2026, traded with a P/E ratio around 19-20x, appearing attractive relative to its historical average and some peers in the IT services sector, which generally commanded higher multiples historically for growth expectations. Competitors like TCS and Wipro were trading at similar or slightly higher P/E multiples, indicating a broadly valued sector.
Tenneco Clean Air India's performance is indicative of broader strengths in the Indian auto ancillary market, which has been driven by increased domestic demand and export opportunities. While specific financials for the Indian entity are not public, the parent company’s performance in the Clean Air segment suggests resilience in traditional automotive components despite the transition towards electric vehicles, as companies focus on emissions control and efficiency for internal combustion engines still in demand.
Navin Fluorine International's P/E ratio hovered around 55-57x by late February 2026, placing it at a premium valuation. This is not uncommon for specialty chemical players with strong growth prospects, especially in CDMO segments. Its closest competitor, Gujarat Fluorochemicals, traded at a similar high P/E of around 56-57x, underscoring the sector's premium despite potential valuation stretch. The sector’s growth is underpinned by government initiatives and global demand for advanced materials.
Ahluwalia Contracts traded at a P/E ratio of approximately 20-23x by mid-February 2026. While this valuation is considered 'attractive' relative to some peers like IRB Infrastructure Developers or L&T, it is also noted that the stock's valuation metrics have shifted from 'very attractive' to 'attractive' according to some analyses, suggesting a recalibration of investor expectations. The sector's P/E average can vary significantly, with some mid-cap construction firms trading at lower multiples.
⚠️ THE FORENSIC BEAR CASE
Infosys faces the inherent risk of increased competition in the AI services space, potentially pressuring margins despite the touted expansionary nature of AI. While large deal timelines are intact, concerns about sustained terminal growth rates are a perpetual market question for mature IT giants. For Tenneco Clean Air India, dependence on traditional internal combustion engine components could be a long-term risk as the global automotive industry accelerates its shift to EVs, though the company's focus on advanced technologies like DaVinci DCx suspension mitigates this somewhat. Navin Fluorine International's high valuation, exemplified by its P/E ratio, exposes it to significant downside risk should growth expectations falter or if project ramp-ups, like Project Nectar, face delays or cost overruns. The company also operates in a highly regulated environment for chemical manufacturing. Ahluwalia Contracts' primary risk lies in execution challenges, as evidenced by the GRAP Stage 4 restrictions impacting operations in the NCR region. Contingent liabilities of INR 2,507 crore also present a potential financial overhang. While its order book is robust, the dependency on large infrastructure projects and government spending makes it susceptible to policy changes and execution delays, a common trait among construction firms.
The Future Outlook
JM Financial's projections for Infosys suggest net sales growth from INR 1.78 trillion in FY26E to INR 2.02 trillion by FY28E, with adjusted net profit rising to INR 33.3 billion. For Tenneco Clean Air India, net sales are estimated at INR 7,301.3 crore by FY28E with net profit at INR 918.9 crore, supported by a double-digit CAGR forecast. Navin Fluorine is projected to see net sales reach INR 5,018.1 crore and net profit INR 1,058.4 crore by FY28E, driven by EBITDA expansion. Ahluwalia Contracts is forecast to achieve net sales of INR 6,893.4 crore and net profit of INR 449.4 crore by FY28E, backed by its strong order backlog. Analyst sentiment generally remains cautiously optimistic for the IT and specialty chemical sectors, while infrastructure and auto ancillaries depend heavily on domestic economic policy and execution.