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Jefferies Identifies Key Investment Prospects
Global brokerage firm Jefferies has recommended 'Buy' ratings for three Indian companies: ITC Hotels, AU Small Finance Bank, and Newgen Software, citing substantial potential for stock appreciation. The brokerage has assigned specific price targets, implying significant upside from their current market levels.
ITC Hotels: Steady Growth Amidst Sector Tailwinds
Jefferies maintained its 'Buy' rating on ITC Hotels post its Q3 FY26 results, while adjusting the target price to ₹250, which suggests an upside of over 39% from the prevailing market price. The company reported a consolidated revenue of ₹1,230.68 crore for the quarter ended December 31, 2025, marking a 5.03% year-on-year increase. Profit after tax (PAT) for the quarter stood at ₹236.83 crore, showing a year-on-year growth of 9.64%. This performance was driven by strong demand, higher occupancy, and increased Average Daily Rate (ADR) across key markets. The hospitality sector outlook remains positive, supported by sustained consumption trends and a structural supply-demand imbalance favoring inventory growth. ITC Hotels' 'asset-right' strategy continues to drive expansion, with the company signing 28 new hotels in CY2025 and crossing 150 operational hotels. As of January 21, 2026, ITC Hotels traded around ₹187.32, with a market capitalization of ₹37,406.49 crore and a P/E ratio of 58.95.
AU Small Finance Bank: Robust Financials and Growth Trajectory
For AU Small Finance Bank, Jefferies raised the target price to ₹1,220, maintaining its 'Buy' recommendation, implying an upside of over 22%. The bank posted a strong Q3 FY26 with a net profit of ₹668 crore, a 26% increase year-on-year, and net interest income (NII) growing 16% to ₹2,341 crore. Net Interest Margins (NIM) saw a 25 basis point improvement quarter-on-quarter to 5.7%. Asset Under Management (AUM) grew 19% year-on-year, supported by sustained traction in secured loan books and a recovery in the microfinance segment. The bank's transition towards a universal banking platform is seen as a significant opportunity. As of January 20, 2026, AU Small Finance Bank was trading near ₹1,001.25, with a market cap of ₹74,852.10 crore and a P/E ratio of 32.36.
Newgen Software: Upgrade Amidst Strategic Focus
Jefferies upgraded Newgen Software to 'Buy' from 'Underperform', setting a target price of ₹760, which represents an upside of over 21%. In Q3 FY26, the company reported consolidated revenue of ₹400.28 crore, a 5.03% year-on-year increase. Consolidated PAT stood at ₹62.82 crore, a 29.42% decline year-on-year, largely due to a one-time impact of ₹35.1 crore related to new labor codes. Subscription revenues showed strong growth, up 29% year-on-year, with the SaaS component growing 48%. Jefferies forecasts a 15% EPS CAGR over FY26-28, finding the risk-reward attractive at 22x normalized P/E [cite: A]. As of January 20, 2026, Newgen Software traded around ₹632, with a market cap of ₹8,996 crore and a P/E ratio of 31.85. The company continues to leverage its AI-driven solutions and deepen its presence in verticals like insurance.