Stocks to Watch: Brokerages Optimistic on Varun Beverages & Polycab India

Brokerage firms are optimistic about selected stocks as they highlighted their growth potential and market positioning for the next 12 months.

Jefferies, JPMorgan, and Morgan Stanley shared their views on Varun Beverages, M&M Financial Services, and Polycab India. Brokerages maintained positive ratings and raised their target prices.

Here’s a list of recommendations from top brokerage firms

Jefferies on Varun Beverages

Maintaining a ‘buy’ rating on the stock, the brokerage has fixed a target price of ₹715, thereby indicating an upside potential of over 50% from the current market price of ₹477.

Reflecting strong confidence from growth, the stock has been added to Jefferies' High Conviction List.

Varun Beverages' brands are gaining traction in the market against local competitors, thereby further cementing its position.

Notably, supply chain issues have posed a challenge for Reliance’s Campa Cola as retailers are falling to maintain the stock. Campa Cola is facing a stiff competition from Pepsi and Coca-Cola despite a significant price gap.

JP Morgan on M&M Financial Services

JP Morgan has maintained an ‘Overweight’ rating on the stock and has raised its target price to ₹320 from ₹235, indicating a potential upside of 20% from the current market price of ₹266.

The brokerage believes that M&M Financial has established a strong presence in the market, buoyed by strong momentum. Return on Assets (ROA) has been reset to a stable range of 1.8-2%.

Morgan Stanley on Polycab India

The brokerage gave an “Overweight” rating on Polycab India by keeping a target price of ₹7,395.

Notably, demand for cables and wires skyrocketed in Q4, buoyed by higher government capital expenditure.