Synopsis : Jefferies has reaffirmed its 'Buy' ratings on Reliance Industries, UltraTech Cement, and Poonawalla Fincorp after reviewing their June-quarter performance. The brokerage sees up to 28% upside, backed by earnings visibility, business expansion, and long-term growth drivers.
The June-quarter earnings season has prompted global brokerage Jefferies to reaffirm its positive view on three Indian companies after assessing their latest financial performance.
The brokerage has retained its 'Buy' ratings on Reliance Industries, UltraTech Cement, and Poonawalla Fincorp, while also revising target prices higher for Reliance Industries and Poonawalla Fincorp.
According to Jefferies, these companies continue to offer attractive upside despite operating in different sectors and facing varying near-term business challenges.
Reliance Industries: Jefferies retains ‘Buy’, sees 28% upside
Jefferies has maintained its 'Buy' recommendation on Reliance Industries while increasing its target price to ₹1,705 from ₹1,675, implying an upside potential of 28%.
The brokerage said Reliance's consolidated EBITDA for the June quarter came broadly in line with expectations.
Key highlights
- Upstream business outperformed estimates.
- Oil-to-Chemicals (O2C) segment was marginally below expectations.
- Retail remained the weakest segment due to investments in hyperlocal commerce.
Jefferies has reduced its retail EBITDA estimates for FY27-FY29 by around 1%, citing higher investments to strengthen digital commerce.
Despite near-term pressure in retail, the brokerage remains constructive on Reliance's core businesses.
It expects refining margins to remain healthy due to supply disruptions in the Middle East and Russia, while petrochemical spreads could improve as feedstock availability normalises.
The brokerage also highlighted Reliance's aggressive expansion into artificial intelligence infrastructure.
According to Jefferies, the company's first AI-ready data centre capacity is expected to become operational by the end of calendar year 2026.
"Retail business missed our estimates. Margin declined year on year, largely due to investments in hyperlocal to drive digital commerce share," Jefferies said.
UltraTech Cement: Strong execution keeps brokerage bullish
Jefferies has retained its 'Buy' rating on UltraTech Cement and marginally increased its target price to ₹14,065, implying an upside potential of 20%.
The brokerage believes UltraTech continues to deliver strong operational performance.
June-quarter highlights
- Consolidated EBITDA increased to ₹5,015.5 crore, compared with ₹4,410.3 crore a year ago.
- Cement sales volumes rose to 41.3 million tonnes from 36.8 million tonnes.
- Blended realisations improved during the quarter.
Jefferies noted that demand remained healthy across most regions, particularly in western and central India.
Management expects cement prices to remain stable through the monsoon season despite rising industry costs.
The brokerage also highlighted UltraTech's long-term expansion plans.
The company's entry into the wires and cables business remains on schedule, with commercial operations expected to begin during the third quarter of FY27.
Following the modest earnings beat, Jefferies made only minor adjustments to its estimates while continuing to identify UltraTech as one of its preferred cement-sector picks.
"The June quarter reflected another quarter of strong execution on both earnings and volume growth," Jefferies said.
Poonawalla Fincorp: Jefferies raises target price
Jefferies has maintained its 'Buy' recommendation on Poonawalla Fincorp while raising its target price to ₹560 from ₹490, implying an upside potential of around 19%.
The brokerage said the company's June-quarter earnings broadly matched expectations.
Quarter highlights
- Profit after tax increased to ₹307.7 crore, compared with ₹62.6 crore a year earlier.
- Assets under management (AUM) grew to ₹67,054 crore from ₹41,273 crore.
- Loan disbursements remained healthy across key lending segments.
Jefferies also highlighted margin improvement during the quarter.
Net Interest Margin (NIM) increased to 7.5%, compared with 6.65% in the corresponding quarter last year.
Asset quality remained stable.
Gross Stage-3 assets improved to 1.4% from 1.8%, while collection efficiency remained healthy.
The brokerage expects newer lending segments such as:
- Gold loans
- Education loans
- Consumer durable financing
to become increasingly important contributors to future growth.
"AUM growth was strong, new products are scaling up well. Asset quality was steady with vintage delinquency trends improving," Jefferies said.
Conclusion
Jefferies continues to remain constructive on all three companies despite differing business trends during the June quarter.
The brokerage believes:
- Reliance Industries offers long-term value through energy, telecom, AI infrastructure and improving petrochemical fundamentals.
- UltraTech Cement continues to benefit from strong operational execution, healthy demand and future diversification.
- Poonawalla Fincorp is witnessing robust loan growth, improving profitability and stable asset quality, supported by expansion into higher-yield lending products.
Among the three, Reliance Industries offers the highest implied upside of 28%, followed by UltraTech Cement at 20% and Poonawalla Fincorp at 19%, according to Jefferies.
Disclaimer : The stock ratings, target prices and financial projections mentioned in this article are based on research reports published by Jefferies and are provided solely for informational and educational purposes. They do not constitute investment advice or a recommendation to buy, sell or hold any security. Equity investments are subject to market risks, and projected returns or target prices are not guaranteed. Investors should conduct their own research and consult a SEBI-registered financial advisor before making any investment decisions.
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