JM Financial Recommends 'Buy': 3 Stocks with 18% to 41% Upside Potential
Markets can be unpredictable, fluctuating day by day, but certain stocks remain on investors’ radar due to their potential for growth. JM Financial, a well-respected brokerage house, has identified three such stocks across various sectors, each offering substantial upside potential. These stocks have the potential to rise by up to 41% from their current levels, making them attractive options for investors.
JM Financial on Lodha Developers: Growth Strong, but Cash Flows in Focus
In the real estate sector, JM Financial has given a ‘Buy’ rating to Lodha Developers, projecting an upside potential of nearly 41% with a target price of Rs 1,240. The brokerage's report highlights the company's steady sales growth. Lodha reported pre-sales of Rs 5,900 crore, a 23% rise compared to last year and a 5% increase from the previous quarter, which aligns with JM Financial’s expectations.
For FY26, pre-sales stood at Rs 20,500 crore, a 16% increase from the previous year. Key markets like South Central Mumbai and Bengaluru have been major contributors to this growth. However, the cash flow performance is tepid, with only a 4% year-over-year (YoY) growth in collections. Despite this, Lodha has been actively investing in new projects. The company invested Rs 6,800 crore in business development and approvals, adding Rs 60,000 crore worth of new projects.
The brokerage remains positive, noting that Lodha continues to demonstrate steady execution across key parameters and is well-positioned to sustain this momentum.
JM Financial on GMR Airports: Traffic Concerns vs Long-Term Opportunity
Another stock on the list is GMR Airports, with a target price of Rs 115, implying an upside of around 20%. The primary concern surrounding this stock is the impact of the new Noida airport on traffic at Delhi airport. However, JM Financial believes these fears may be overdone. The brokerage’s detailed analysis suggests a domestic traffic shift potential of 10–15% and an insignificant shift (<4%) in international traffic.
Connectivity challenges could limit the immediate impact of the new airport. The preference is unlikely to change until the RRTS connection with NIAL is in place. Additionally, there are short-term headwinds, such as the impact of geopolitical factors on international traffic. The brokerage notes that near-term international traffic has been affected due to the West Asia crisis.
JM Financial on City Union Bank: Stable Growth with Improving Metrics
The third stock is City Union Bank, where JM Financial has set a target price of Rs 320, indicating an upside of about 18%. The bank has delivered strong growth in both loans and deposits. Advances and deposits grew by 26% and 23% YoY, respectively, with a quarter-over-quarter (QoQ) increase of 8% and 11%.
Asset quality, a critical concern for banks, has shown improvement, with GNPA/NNPA moderating. The brokerage expects steady growth ahead, forecasting a loan CAGR of approximately 18% during the FY26-28 estimates.
What Investors Need to Know
Overall, Lodha Developers is experiencing strong demand but needs to improve cash flows. GMR Airports faces near-term traffic concerns but has long-term growth visibility. City Union Bank is delivering steady performance with improving asset quality.
Disclaimer: The investment recommendations and target prices mentioned in this report are based on analysis by JM Financial and are for informational purposes only. Trading in equities involves significant market risk, and the projected upside potentials are not guaranteed. Readers are advised to consult with a SEBI-registered financial advisor before making any investment decisions, as individual financial goals and risk appetites vary. This content does not constitute an offer or solicitation to buy or sell any securities.
