The brokerage firm JM Financial has listed its top three Buy recommendations for the hour. From tech-driven connectivity to wealth management and hyperlocal delivery, the brokerage sees compelling long term stories. Let’s take a look at why Tata Communications, 360 ONE WAM, and Swiggy have made it to their must watch list..
Tata Communications: Digital megatrends male this a Buy at Rs 2,000
The brokerage fim JM Financial has reiterated its Buy rating on Tata Communications, with a revised target price of Rs 2,000 per share. The brokerage values the company at 11 times EV/EBITDA for FY27 for the data segment, slightly above the 5-year historical average of 10.4 times, betting big on the 24% CAGR growth in EBITDA over FY25-28.
According to the brokerage, “Tata Communications consolidated revenue came in better than expected at Rs 5,990 crore in Q4, driven by stronger core connectivity performance.” While the EBITDA missed estimates due to one offs, the brokerage believes this is temporary. The management remains confident that EBITDA margins, currently around 20%, will gradually improve to 23-25% by FY27.
“We maintain our BUY rating on TCOM… we expect strong growth in the digital portfolio aligned with megatrends such as cloud, AI, and IoT,” the brokerage said in its report.
However, it also pointed out risks such as a global slowdown impacting tech spending and any delays in the digital portfolio achieving profitability. Still, long-term investors could see value as synergies from recent acquisitions and operating leverage play out.
Swiggy: Brokerage says Buy at Rs 500 for the long haul
The brokerage maintains a Buy rating for Swiggy and a target price of Rs 500, based on a sum-of-the-parts (SOTP) valuation.
According to the brokerage house, while Swiggy’s stock may remain volatile in the near term due to the May 12 lock-in expiry, this could create a window for savvy long-term investors to build exposure. The brokerage highlights that nearly 83% of the stock remains locked in, and even a 15% release could mean shares worth Rs 12,000 crore hitting the market, equivalent to the size of the IPO.
“We value the company’s food delivery business at 45x FY27E Adj. EBITDA, while Instamart is valued at 1x GOV FY27E. Other verticals are valued using conservative multiples,” the brokerage firm wrote.
It added, “Long-term investors with a strong conviction on India’s hyperlocal delivery market can use these liquidity events to build a sizeable position. We maintain Buy.”
360 ONE WAM: Target raised to Rs 1,180
The brokerage firm continues to be bullish on 360 ONE WAM, maintaining its Buy rating and increasing the target price to Rs 1,180, up from Rs 1,050. The stock is now valued at a blended 30 times FY27 expected EPS of Rs 39. This includes PE multiples of 32 times and 33 times for the wealth and asset management segments, respectively.
According to the brokerage, the company delivered a “steady operating performance” in the latest quarter, with operating PBT rising 16.5% YoY and 11% QoQ to Rs 320 crore. The company also managed to keep costs under control and improved its operating efficiency.
What stood out for the brokerage firm was the consolidation of ET Money’s Rs 33,100 crore AUM, which helped total assets under management rise to Rs 5.8 lakh crore. The upcoming B&K Securities acquisition and the recently signed UBS deal are expected to strengthen 360 ONE’s international presence, especially among global Indian clients.
“As we incorporate the dilution resulting from the UBS transaction, we see our FY27 EPS cut by 0.7%. However, we believe it will further strengthen the platform in the medium term,” the brokerage noted.