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Jefferies Reviews Picks Amid Market Turmoil
Global brokerage Jefferies has updated its March 2026 stock ideas, adjusting its recommendations amid significant market turbulence. The Nifty 50 experienced an 8% decline in March 2026, attributed to ongoing geopolitical tensions in the Middle East. This has led Jefferies to adopt a cautious but selective approach. The firm's latest review includes 23 'Buy' recommendations and eight 'Underperform' calls, showing a clear preference for companies demonstrating resilience and long-term growth potential.
Jefferies' Strategy: Focus on Quality and Growth
Jefferies' updated recommendations signal a strategic focus on companies with strong fundamentals and clear growth drivers. Seven companies were newly added to the 'Buy' list: State Bank of India (SBI), Star Health and Allied Insurance Company, Billionbrains Garage Ventures (Groww), Bharat Forge, JSW Steel, Eternal (presumed Zomato ecosystem), and Max Healthcare. They join existing favorites like HDFC Bank and Hindustan Aeronautics. The firm's analysis points to companies set to benefit from credit growth, capacity expansion, digital trends, and defense sector opportunities, even as external factors affect overall market sentiment.
Analysis: Top Stock Picks and Valuations
Jefferies' reasoning for these selections covers various industries with distinct opportunities. For State Bank of India (SBI), a target price of Rs 1,300 suggests a 22.4% potential upside. Jefferies projects steady earnings growth, driven by an estimated 13% loan growth and credit costs stabilizing around 45 basis points for FY27-28. SBI's P/E ratio is approximately 12.43. The bank's effort to boost deposit growth to 11-12% is seen as key for continued credit expansion.
Star Health and Allied Insurance has a 'Buy' rating with a target of Rs 660, indicating a potential 44.4% upside. Jefferies forecasts about 16% annual premium growth for FY26-28, supported by investments in distribution and product offerings. Profitability is expected to improve as claims stabilize.
Billionbrains Garage Ventures (Groww) is a new 'Buy' with a target price of Rs 195 (26.5% upside). Jefferies expects strong revenue growth from new products and increased client assets, highlighting Groww's market leadership with a 28% share of active clients. The platform's expansion into margin trading, commodities, and wealth management is a significant growth driver. Separately, Jefferies initiated coverage with a 'Buy' rating and a target of Rs 180, projecting a 35% EPS CAGR through FY26-28.
Bharat Forge keeps its 'Buy' rating and a target of Rs 2,150 (26.4% upside), supported by growing commercial vehicle demand and defense orders. Jefferies anticipates faster earnings growth, projecting a 33% CAGR over FY26-28. In contrast, rival UBS has a 'Sell' rating with a target of Rs 1,365.
JSW Steel is added as a 'Buy' with a Rs 1,400 target (23.6% upside). Jefferies forecasts earnings growth from better spreads and expanded capacity, noting its position as India's largest producer. This Rs 1,400 target matches prior calls, though a previous adjustment had set the target at Rs 1,200. Government safeguard duties also support the steel sector.
Max Healthcare is now a 'Buy' with a target of Rs 1,320 (32.9% upside). Growth is expected from capacity additions, including plans to double bed capacity over three to four years through brownfield expansions. Recent acquisitions are performing well, and the company is projected for over 20% EBITDA growth. Other analysts also maintain positive views, with some prior targets near Rs 1,400.
Jefferies Flags Risks for Underperform Stocks
Jefferies' caution is clear in its maintained 'Underperform' ratings for Hyundai India, Wipro, and Cipla. For Hyundai, rising competition in the passenger vehicle market and a less robust product pipeline are concerns, compounded by losing its second-largest market position. Wipro is expected to continue underperforming peers, with only a projected 2% revenue CAGR over FY26-28. This is largely due to its consulting business and slow deal ramp-ups. Cipla faces near-term pressure in its U.S. operations from increased competition for key products and limited pipeline visibility due to regulatory issues at its Indore facility. The broader IT sector faces scrutiny, with Jefferies warning of potential AI disruptions and cutting earnings estimates, forecasting downside risks for major IT firms.
Outlook: Sector Trends and Future Growth
Jefferies' March update shows a shift towards companies with better earnings growth visibility, especially in banking, healthcare, and digital finance. Delhivery was upgraded to 'Buy' from 'Underperform', reflecting improved operating trends and logistics demand. Laurus Labs moved to 'Hold' as its near-term earnings growth is expected to slow amid changing market conditions. The banking sector remains resilient, with projected credit growth in the low-to-mid teens for FY26-27, despite some net interest margin compression and increased competition for deposits. The automotive parts sector is set for moderate growth, though raw material costs remain a challenge.