Global brokerage major Jefferies today released a list of its top equity stock picks for the next five years, which could deliver 12-25% returns over the next five years. The New York-based global brokerage's top 11 picks for India are Amber, Ambuja Cement, Axis Bank, Bharti Airtel, JSW Energy, L&T, Macrotech, Max Healthcare, SBI, TVS Motors and Zomato.

Jefferies says the capex cycle theme drives several of its top picks (Ambuja, Axis, JSW Energy, L&T, Macrotech). Other themes that could play include government manufacturing push (Amber), state-owned enterprises (SOE) reforms (SBI), penetration stories (Max Health, Zomato), financialisation of savings (Axis, SBI) and key consumer or bottom-of-pyramid ideas (Bharti, TVS).

Amber is Jefferies' top SMID pick, with a 'buy' rating and a 5-yr price target of ₹9,740, over 169% upside from the current market price. "Our conviction is underpinned by secular growth prospects (India AC penetration at 7% vs global avg 30%), Amber's leadership position in AC outsourcing (~29% value market share now vs. 22% in FY19), diversification into margin-accretive faster-growing components business and a diversified customer base," says the brokerage.

Ambuja, the second-largest cement producer in India, is on a renewed strength post-ownership change in 2022, says Jefferies. "Led by capacity expansion, volume scale up, efficiency improvement, and ESG, the company is on its way to deliver strong operating outperformance over most peers." The brokerage sees a 5-yr price target at ₹1,250, which implies a 17x FY30 EV/EBITDA. "Recommend BUY."

The third crucial stock in Jefferies' list is Axis Bank, which could deliver 18% CAGR in EPS over FY24-29 as it leverages on improvement in deposit franchise, ramp-up of digital and lending platforms and ramp-up of its subsidiaries, says Jefferies. "We see 5yr TP of ₹2,810, implying 162% returns over 5yrs."

The fourth stock on the list is Bharti Airtel. Jefferies says its strong EBITDA growth (13% India CAGR as ARPUs rise faster than nominal GDP); along with moderating capex will drive a 21% CAGR in Bharti's FCFE over FY24-30 and will push up Bharti's ROCE to 25%+.

On JSW Energy, Jefferies says, a 3x jump in power capacity to 20GW by FY30, with the renewable share rising to 80% + from 50%, will drive significant upsides over 5 years.

Another pick by Jefferies is L&T. The largest Indian contractor, says Jefferies, will be able to achieve over 15% revenue CAGR over FY23-30E, driven by a broad recovery in India capex cycle, market share gains and execution ramp up.

Macrotech Developers, Jefferies’ 7th pick, could see 17.5% CAGR pre-sales growth, says the brokerage, adding that alongside, Mumbai infra upgrade could drive less than 10% CAGR pricing uptick in large township land, driving significant rerating and less than 150% stock gains.

On Max Healthcare, Jefferies says, under-penetration in quality healthcare and doubling of Max's bed capacity by FY30 will drive 17% revenue and 20% EBITDA CAGR over the next 5 years.

The rest of the three picks by Jefferies are SBI, TVS Motors and Zomato. "13% loan growth driven by retail, SME & corporate; alongside ROA expansion beyond 1% as cost-to-income ratio declines to drive 18% earnings growth," says the brokerage on India's largest PSU bank.

On TVS Motors, Jefferies sees the company benefitting from a revival in Indian two-wheeler demand and a transition to e2W, which it says could drive 12% volume and 26% EPS CAGR, triggering strong stock returns.

For Zomato, low penetration levels in core segments is seen offering a long runway to growth, with both food delivery (19% GOV cagr over FY24-30) and quick commerce (40% cagr) expected to jump. "Profits to rise 20x over FY24-30, driving PT of ₹400, offering 150%+ returns."

(DISCLAIMER: The views and opinions expressed by investment experts on are either their own or of their organisations, but not necessarily that of and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)

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