The brokerage firm Jefferies has maintained a bullish stance on KFin Technologies and Larsen & Toubro (L&T), giving a ‘Buy’ rating to both stocks. As per the brokerage report, KFin is riding the wave of acquisition to boost its global footprint. Similarly, L&T is resilient amid crude price fluctuations and Middle East order concerns.
Let’s take a closer look at why the brokerage is bullish on these stocks-
Jefferies on KFin Technologies
The brokerage firm has given a Buy rating on KFin Technologies with a target price of Rs 1,310, implying an upside of 24% citing its global expansion and attractive deal valuation
According to the brokerage report, KFin Technologies acquisition of a controlling stake in Ascent Fund Services marks a crucial step in its international growth story. The company is acquiring a 51% stake in Ascent for $68 million (post-money valuation), with plans to increase this to full ownership by 2030.
The brokerage further notes that this move by the company complements KFin’s fund administration suite and helps it accelerate its global footprint.
“Ascent’s margins are lower, and KFIN plans to lift them to its own levels (45% in Q3) over the medium term,” noted the brokerage firm in its report.
As per the brokerage, Ascent is expected to see robust revenue growth, from $18 million in FY25E to $70 million by FY31, with EBITDA margins also climbing from 25% to 35% over the same period.
Jefferies on Larsen & Toubro
The brokerage firm has given a Buy rating on Larsen & Toubro with a revised target price of Rs 3,930 from Rs 4,500, factoring in a lower valuation multiple (16x vs. 18x earlier) despite Middle East oil fears. It implies an upside of 21%.
As per the brokerage firm, although there is concern that looms around the weak crude oil prices, and their possible impact on the company’s middle east business, the fear is overdone.
The brokerage house report analysis shows that the real impact of falling crude on L&T’s order flows tends to materialise only after a two-year lag.
“L&T’s share price tends to underperform Nifty 3–20% in weak crude years; 1-year L&T underperformance is 15% already,” the brokerage pointed out.
As per the brokerage report, the company’s net working capital issues were more pronounced when crude was consistently above $80/bbl, particularly due to domestic project delays and payment issues.
Looking ahead, the brokerage firm expects FY26 guidance to be a key driver of stock performance. Furthermore, the firm noted out in its report that after a strong FY25 where order inflows are expected to beat guidance at 15% YoY. It also noted that even 5% to 10% growth in FY26 would be viewed positively.
“We believe 1-year and YTD underperformance to Nifty largely factors negatives,” Jefferies noted.
Moreover, it is also interesting to note that crude oil prices also tend to correlate with this company’s stock performance as well as broader market trends. On a similar note, this also sometimes acts as a barometer of global growth sentiment. The brokerage also in its report noted that even during periods of low oil, the company’s revenue remained stable and working capital also improved.