SBI, L&T and Zomato among 11 stocks that Jefferies is bullish on for the next five years
In the housing space, Macrotech Developers is the brokerages preferred bet for five years, as it maintains that a strong housing cycle will drive 17.5 per cent CAGR pre-sales growth.
Ahead of the Lok Sabha elections, global brokerage Jefferies, which holds a positive view on the Indian economy, has listed the top 11 stock ideas that it believes can reap between 15 and 35 per cent CAGR over the next five years. In its selected portfolio, the brokerage sees between two and three times the upside.
Further, the selected bets range from diverse sectors, including construction, real estate, health care, auto, and new-age stocks.
Stocks Mar-29 Target Upside from CMP | ||
Amber Enterprises 9740 2.9x | ||
Ambuja Cement 1250 2.1x | ||
Axis Bank 2810 2.7x | ||
Bharti Airtel 2530 2.1x | ||
JSW Energy 1100 2.2x | ||
L&T 7564 2.1x | ||
Macrotech 3000 3x | ||
Max Healthcare 1925 2.7x | ||
SBI 1860 2.5x | ||
TVS Motors 5000 2.4x | ||
Zomato 400 2.5x |
The brokerage is bullish on Amber Enterprises, which it says is the key beneficiary of India's manufacturing growth story. Another stock on the select list of Jefferies is Ambuja Cement. The brokerage maintains that strong demand from the capex upcycle will drive a 19 per cent EBITDA CAGR.
In the banking sector, Jefferies has cherry-picked SBI and Axis Bank. For the state-run lender, the brokerage anticipates 13 per cent loan growth driven by retail, SME, and corporate, together with return on assets (ROA) expansion beyond 1 per cent. For the private sector lender, the brokerage sees a 17 per cent loan/ 18 per cent EPS CAGR over FY24–29.
Another pick by the global brokerage is Bharti Airtel, and for the telecom behemoth, the brokerage sees strong EBITDA growth along with moderating capex. Similarly, the brokerage has also listed L&T, the Nifty heavyweight stock, as a buy for the next five years and expects to realise a 15 per cent plus revenue CAGR over FY23–30.
Furthermore, in the auto space, the brokerage is positive on TVS Motor and sees it to come strong amid the increase in demand for two-wheelers and shift to electric two-wheeler vehicles, or E2W.
In the sustainable energy space, Jefferies is bullish on JSW Energy and sees a three-fold jump in power capacity to 20 GW by FY30, with renewable share rising to 80 per cent. Besides, in the healthcare space, the brokerage is bullish on Max Healthcare and sees it as benefiting due to Max's under-penetration in quality healthcare and doubling of Max's bed capacity.
In the housing space, Macrotech Developers is the brokerage's preferred bet for five years, as it maintains that a strong housing cycle will drive 17.5 per cent CAGR pre-sales growth.
It is also bullish on food-delivery new-age company Zomato, as it holds that low penetration levels in core segments offer a long runway to growth.
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