Jefferies picks 3 stocks including Infosys: Know target price and the reasons for optimism?

Kolkata: US-based MNC brokerage Jefferies has come out with three stock recommendations. These stocks are in three different industries retail, information technology and solar energy. While each has a significant upside, one has up to 70% from the level when Jefferies made the recommendation this week. Let's see what these stocks are, their target prices and what drives the optimism of the global broking firm.

Target Price: Rs 1,880

Jefferies has maintained its ‘Buy’ rating on Infosys. The target price of Rs 1,880 is the base case trice. It signals a 17% upside. The brokerage emphasised that Infosys reported Q3FY26 revenue of $5.1 billion, up 0.6% (q-o-q) in constant currency terms. It has exceeded markets estimates. Moreover, there have been large contracts which are worth $4.7 billion. One of the these is a deal from NHS.

Adjusted EBIT margins have risen by 20 basis points (q-o-q) to 21.2%. On the other hand, normalised profit jumped 12% year-on-year to touch Rs 7,625 crore, boosted by higher other income and a lower tax rate. "The guidance revision appears driven by the December quarter beat rather than a stronger March quarter outlook,” Jefferies noted. The Infosys authorities upped FY26 constant-currency revenue growth guidance to 3.0–3.5%. Jefferies expects Infosys to deliver 5.4% constant-currency revenue CAGR between FY26 and FY28 and also expects margins holding near 21%.

Target Price: Rs 3,120

Jefferies has maintained ‘Buy’ rating on HDFC Asset Management Company. It has fixed a target price of Rs 3,120 which is a base-case target price. This stock represents an upside of around 22%. The PAT for Q3FY26 jumped 20% (y-o-y) to touch Rs 769 crore. This beats market expectations slightly. Higher other income and cost controls have done the trick in this case.

The brokerage has noted that average assets under management grew 19% year-on-year to Rs 9.21 lakh crore. It has been attributed to 20% rise in equity AUM, which now constitutes 67% of total AUM. Core revenue grew 15% y-o-y. Employee costs have gone up due to ESOP-related expenses. The market share of the AMC remained stable in equity and debt funds. But it share in liquid funds went down and it impacted yields. Jefferies has stated that it thinks AUM will display 20% CAGR between FY26 and FY28 and will be led by equity inflows. The brokerage has stated that the impact of the new TER rules should be low to manageable for the AMC.

Target Price: Rs 920

Jefferies has retained ‘Buy’ on HDB Financial Services. The target price mentioned here is a base-case price. It signals a nearly 20% upside. The brokerage noted how the company's profit for Q3 zoomed 36% y-o-y to touch Rs 640 crore. In this performance, the company exceeded market expectations. Lower provisions and higher fee income did the trick for HDB Financial Services. Growth in profits was recorded in this quarter at 45% even after providing for a one-time provision for the new labour codes.

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Disbursements grew 10% and assets under management rose 12% y-o-y to reach Rs 11.49 lakh crore. Net interest margins went up by 14 basis points q-o-q to touch 8.1%. Jefferies expects AUM growth of the company to rise to 16% in FY27. It also says that lower credit costs could support earnings growth of 29% CAGR between FY26 and FY28. There are hope of return on equity improving to 16%.

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