Jefferies 4 ‘Buy’ Recommendations: Up to 22% Return Potential

Global brokerage firms often set the tone for market sentiment, and Jefferies is no exception. When such a reputed institution issues a ‘Buy’ rating on select stocks, investors take notice. Recently, Jefferies highlighted **four Indian companies—Paytm, Axis Bank, IndiGo, and Patanjali Foods—**as strong buy opportunities.

According to the report, these stocks present a return potential of 16% to 22%, supported by solid fundamentals, sectoral growth, and improving financial metrics. While each stock comes with its own opportunities and risks, Jefferies believes they are well-positioned to deliver above-average returns in the coming quarters.

In this article, we’ll break down each recommendation, including target prices, growth drivers, and risk factors.

Comparative Snapshot of Jefferies’ 4 Buy Calls

Paytm: Positioned for a Turnaround

Jefferies has maintained a bullish stance on Paytm, projecting a potential upside of nearly 21%. The optimism is driven by expectations of lower operating expenses and steady growth in financial services. The brokerage also upgraded EBITDA estimates for FY27-28, indicating a healthier profit outlook.

Another positive factor is the reduced regulatory headwinds. While the fintech sector remains under scrutiny, Paytm’s exposure to risky segments like rent payments and gaming is minimal. This provides greater clarity and stability for long-term investors.

Key Risk: Despite the positives, Paytm faces tough competition from other fintech giants, which could pressure margins and customer retention.

Axis Bank: Solid Balance Sheet and Attractive Valuation

Axis Bank continues to remain one of the top picks for Jefferies, with a 21% return potential. The brokerage points to improving deposit growth and stabilization in unsecured personal and SME loans as critical strengths. Additionally, the bank’s valuations are considered attractive, leaving room for rerating.

Axis Bank’s strong retail franchise and improving asset quality add further confidence to the bullish call. Investors looking for relative stability in the financial sector may find Axis Bank appealing.

Key Risk: Rising NPAs or adverse interest rate movements could affect net interest margins (NIMs) and profitability.

IndiGo: Flying High with International Growth

Among the four recommendations, IndiGo shows the highest return potential of around 22%. Jefferies highlights the airline’s aggressive fleet expansion and entry into new international routes, which are likely to fuel growth. Operational efficiency, cost management, and regulatory approvals also support the bullish stance.

With air travel demand surging in India and abroad, IndiGo is positioned to capture a larger market share. Its modern fleet and better yield management make it a standout pick in the aviation space.

Key Risk: Rising aviation fuel prices and currency fluctuations remain critical challenges, along with geopolitical uncertainties that could disrupt international operations.

Patanjali Foods: Consumer Demand and GST Relief

Jefferies sees a 16% upside in Patanjali Foods, supported by lower GST rates on several of its FMCG products, which will make them more affordable for consumers. Additionally, festive demand and reduced competitive pressure could drive higher sales volumes.

The company has also shown resilience in navigating challenges in the edible oil and food segment. With rising health-consciousness and brand loyalty, Patanjali Foods may benefit from strong consumer sentiment.

Key Risk: Commodity price volatility and supply chain disruptions could weigh on profitability in the near term.

Conclusion

Jefferies’ latest recommendations highlight opportunities across fintech (Paytm), banking (Axis Bank), aviation (IndiGo), and FMCG (Patanjali Foods). Each stock presents unique growth drivers, with upside potential ranging from 16% to 22%.

• IndiGo appears to be the most aggressive growth bet with strong demand tailwinds.

• Paytm offers a recovery story as cost optimization and reduced regulatory risk play out.

• Axis Bank remains a relatively safe play with attractive valuations.

• Patanjali Foods caters to domestic consumption trends and GST-led demand revival.

For investors, these four stocks could serve as strategic additions to a diversified portfolio, provided the associated risks are well understood.