Buy On Dips: HAL, IndiGo, Dabur And More — Jefferies Picks 14 Stocks

Jefferies has shared a note with 14 ideas to buy the dip highlighting that more than 20% of stocks under its coverage are now trading below the levels seen just after the June election results. Additionally, nearly 30% of these stocks have dropped more than 20% from their year-to-date highs, presenting investors with potential buying opportunities after the recent market correction.

With the MSCI India Index down 8% from its late September peak but still up 17% year-to-date, Jefferies sees room for a short-term bounce, driven by expectations of a surge in government spending and capital expenditure in the second half of the fiscal year. The brokerage firm points to easing valuations relative to regional markets, improved seasonality, and resilient domestic flows as factors that could support a recovery.

Jefferies’ analysts note that cyclical stocks have seen the sharpest declines, with around 48 stocks from its coverage trading below June levels, and 64 stocks down over 25% from 2024 highs. Despite maintaining a cautious medium-term view amid potential budget-related concerns and recent earnings downgrades, Jefferies believes select stocks may offer attractive entry points as the market stabilises.

1. Hindustan Aeronautics Ltd.

2. Coal India Ltd.

3. InterGlobe Aviation Ltd. 

4. Godrej Consumer Products Ltd. 

5. Punjab National Bank

6. Macrotech Developers Ltd. (Lodha)  

7. Cholamandalam Financial Holdings Ltd.

8. Dabur India Ltd. 

9. GMR Airports Infrastructure Ltd. 

10. Supreme Industries Ltd. 

11. IDFC First Bank Ltd.  

12. KEI Industries Ltd.  

13. Mahanagar Gas Ltd.

14. Honasa Consumer Ltd.

The company stands out as a primary beneficiary of India's defence indigenisation push, with a robust order pipeline worth Rs 1.6-1.7 trillion and strong revenue visibility, says Jefferies. The stock’s attractive position stems from an anticipated 14% compound annual growth in India’s defence industry, driven by government initiatives and export growth. 

The bank’s stable asset quality and robust growth in loans and deposits place it in a favourable position, particularly as it moves towards a more efficient tax regime.

The real estate giant also features in the list, with Jefferies noting its vast land holdings in the Mumbai Metropolitan Region and a promising growth trajectory in residential sales, making it well-positioned for gains as infrastructure developments progress.

IndiGo’s extensive domestic market share and capacity expansion initiatives mark it as another pick. Jefferies highlights IndiGo’s recent stock price correction due to grounded aircraft as a short-term disruption, with new aircraft additions expected to support further growth and cost normalisation, particularly as India’s travel market expands.

The FMCG player made to the list due to its structural changes and new product innovations under CEO Sudhir Sitapati’s leadership, delivering high-single-digit growth across several categories. With efforts to streamline operations in Africa and roll out exclusive new products, GCPL is positioned for a strong, sustained growth trajectory, says Jefferies. 

The mining company stands to benefit from India’s robust economic growth, rising power consumption, and thermal capacity expansions, Jefferies said. It expects 5% volume growth over fiscal 2024-27 estimates.

The investment company is poised for steady growth, with a 24% CAGR in assets under management over the next three years, Jefferies said. This will be supported by diversification benefits, despite auto slowdown concerns. Valuations have moderated post-correction, and Jefferies sets a price target of Rs 1,690 per share on the stock, based on 4.2 times FY26E book value.

Dabur India Ltd. is positioned to benefit from improving rural demand and the upcoming winter season, which could bolster its healthcare portfolio, especially with a harsh weather outlook. The company’s focus on the rural market and resilient product portfolio should lead to recovery, with potential upside as rural demand stabilises, Jefferies said.

This airport developer is capitalising on India’s growing air traffic and strong travel retail business potential, with a robust passenger growth outlook of 11% CAGR through FY24-FY27E. Jefferies expects that the near tripling of aero tariffs at Delhi Airport for next control period (fiscal 2025-29), higher tariff at Hyderabad, and new tariff at the Goa Airport will all boost revenue and Ebitda growth. Jefferies has a target price of Rs 110 per share.

The plastic pipe company continues to outpace market growth with its expansive product range and distribution network. Strong volume growth in plastic pipes, resilient margins, and a robust balance sheet, backed by zero debt, position the company for solid earnings growth. Jefferies expects a 22% CAGR in earnings over fiscal 2024-27 estimates and set a price target of Rs 6,450 apiece.

Despite a 24% decline in its share price in 2024, IDFC First Bank is poised for recovery. Correction in stock price reflects disappointment in earnings, on the back of slower growth in loans, negative operating leverage and rise in MFI credit costs. 

The electrical wires and cables manufacturer stands to benefit from the growing power, capex cycle, and infrastructure development in India, particularly with its strong position in the Extra High Voltage cable segment. The company’s expanding retail sales and capacity increases are expected to drive growth, with Jefferies setting a price target of Rs 5,720 per share, valuing the company at 45 times FY27E its price to earnings.

The LPG supplier continues to see robust double-digit volume growth, driven by an expansion in retail outlets, the note said. Despite facing limited risks from electric vehicles in the near term, the stock trades at a 10% discount to Indraprastha Gas, which could be attractive given its stronger growth outlook.

The personal care product company, with its flagship Mamaearth brand and a portfolio of six brands, is set to benefit from rapid growth, driven by its aggressive shift to offline channels, Jefferies said. The company is profitable, with a 7% Ebitda margin in fiscal 2024, and is poised for a 21% revenue CAGR over FY24-27E. The scaling of new brands will continue to drive strong growth.