JM Financial Flags 4 Indian Stocks With Up to 34% Upside
Overview
JM Financial has issued high-conviction 'Buy' ratings on four Indian companies: Larsen & Toubro, Just Dial, ICICI Lombard General Insurance, and ICICI Prudential Life Insurance. Despite short-term headwinds like global uncertainties and rising operational costs, the brokerage sees attractive long-term fundamentals and valuations, projecting double-digit upside potential up to 34% in select stocks.
Stocks Mentioned
JM Financial's Bullish Stance
Brokerage firm JM Financial has identified four Indian companies as high-conviction 'Buy' opportunities, signaling significant upside potential despite recent market jitters. The firm's latest research highlights attractive long-term prospects for Larsen & Toubro, Just Dial, ICICI Lombard General Insurance, and ICICI Prudential Life Insurance.
Larsen & Toubro's Order Pipeline
JM Financial reiterated its 'Buy' rating on Larsen & Toubro (L&T) with a target price of ₹4,500, implying a robust 34% potential upside. While L&T faces headwinds from Kuwait's potential cancellation of $8.7 billion in oil and gas tenders, leading to a 5-6% cut in core order inflow estimates for FY26-28, the brokerage believes the stock's recent 3% dip has largely priced in this delay. JM Financial still anticipates L&T to meet its FY26 order inflow growth target of 10% year-on-year, buoyed by strong fourth-quarter prospects.
Just Dial's Cash Position
The firm maintains a 'Buy' rating on Just Dial with a target price of ₹1,060, suggesting an 11.5% upside. Collections saw an 8.1% increase in Q3, a positive indicator for future revenue. However, traffic trends remained weak at -3.5% year-on-year despite higher advertising and promotion spends. An overhang persists due to the lack of clarity on the company's cash distribution policy, even as cash and investments now exceed 90% of its market capitalization.
ICICI Lombard's Resilient Business
JM Financial maintained its 'Buy' call on ICICI Lombard General Insurance, setting a target of ₹2,333, a 19.5% potential increase. The insurer's profit after tax of ₹660 crore missed expectations by 12%, partly due to a ₹55 crore one-off provision for the new Wage Code. Nonetheless, the core business shows strength, particularly with consistent over 80% growth in retail health insurance, reinforcing a positive long-term outlook.
ICICI Prudential Life's Valuation
ICICI Prudential Life Insurance Company received a reiterated 'Buy' rating with a target price of ₹880, offering a 17% upside. The company posted a strong Value of New Business (VNB) of ₹620 crore. JM Financial views the current valuations at 1.4x March 2028 Embedded Value (EV) as undemanding. Despite a soft growth in December, Annual Premium Equivalent (APE) grew 4% after three quarters of contraction, with expectations of a strong 23% growth in Q4 and a consistent 16% VNB compounding over the coming years.
