Jefferies Upgrades Four Indian Stocks, Sees Up to 23% Upside

Jefferies has expressed a positive outlook on select Indian companies in its recent research, upgrading four stocks with 'Buy' ratings and significant upside potential. These include Shriram Finance, HDB Financial Services, Aditya Birla Capital, and JK Cement, with projected gains ranging up to 23%. The brokerage highlighted that non-bank financial companies (NBFCs) are entering a period of stable margins and reduced credit costs. Building material firms like JK Cement are expected to benefit from ongoing capacity expansions and consistent market demand. Jefferies anticipates all four companies will sustain double-digit earnings growth until fiscal year 2026, driven by operational efficiency and sound financial management.

Specifically for Shriram Finance, Jefferies reiterated its ‘Buy’ call with a target price of Rs 880, forecasting an 18% increase. The firm expects 20% Earnings Per Share (EPS) compound annual growth rate (CAGR) and 16–18% Return on Equity (ROE) over FY26–28, valuing the company at 2x FY27 book value.

HDB Financial Services received a retained ‘Buy’ rating and a target of Rs 900, indicating a 23% upside. Jefferies sees HDB benefiting from revival in retail demand and consumption credit, expecting steady asset growth and stable funding costs.

Aditya Birla Capital maintained its ‘Buy’ rating with a target of Rs 380, a potential 22% rise. The company is supported by a shift towards unsecured loans and growth in housing finance, with Jefferies projecting 21% annual EPS growth through FY28.

For JK Cement, the ‘Buy’ rating and target price of Rs 7,230 suggest a 16% upside. Despite a slight miss in Q2FY26 EBITDA, Jefferies remains positive, expecting 21% EBITDA CAGR over FY25–28. The company's capacity expansion to 40 million tonnes per annum by FY28 is on track, and it continues to show leading volume growth.

Impact: This news could positively influence the stock prices of the mentioned companies, potentially driving investor interest in the NBFC and building materials sectors. The analyst's high conviction suggests potential for broader sector sentiment improvement if these companies meet expectations. Rating: 8/10

Definitions: * **NBFC**: Non-Banking Financial Company. These are financial institutions that provide banking-like services but do not hold a full banking license. * **NIM**: Net Interest Margin. The difference between the interest income generated by a bank or other financial institution and the interest it has paid out, expressed as a percentage of the earnings generated from interest-bearing assets. * **EPS CAGR**: Earnings Per Share Compound Annual Growth Rate. The average annual growth rate of a company's earnings per share over a specified period, assuming profits were reinvested at the end of each year. * **ROE**: Return on Equity. A measure of a company's profitability that calculates how much profit a company generates with the money shareholders have invested. * **NPAs**: Non-Performing Assets. Loans on which interest or installments have not been received for a specified period (usually 90 days). * **EBITDA**: Earnings Before Interest, Taxes, Depreciation, and Amortization. A measure of a company's overall financial performance, used as an alternative to net income. * **EV/EBITDA**: Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization. A valuation metric used to compare companies within the same industry.