JM Financial Highlights Top 4 Buy Recommendations for Robust Market Gains
May 22, 2025 — By Oliviya Kunjumon, Smart Money Mindset
JM Financial, a leading brokerage firm, has identified four standout stocks across various sectors that it believes offer strong growth potential for investors. These stocks are Innova Captab, Fortis Healthcare, Oil India, and Power Grid Corporation. The firm maintains a bullish outlook based on solid financial performance and promising future prospects. Here’s an in-depth look at JM Financial’s top picks and the rationale behind its positive stance.
Innova Captab: Pharma Sector with Promising Growth
JM Financial has reiterated a Buy rating on Innova Captab, setting a target price of Rs 1,152, which indicates an upside of approximately 26.5% from current levels. Despite a mixed quarter for FY25 Q4, with revenues rising 20% year-on-year but falling 7% short of expectations, the company’s performance impressed on margins. The EBITDA margin came in at 15.2%, exceeding estimates by 102 basis points, and the company posted a modest 3% year-on-year increase in profit after tax (PAT) at Rs 296 crore.
The brokerage notes that the recent commercialisation of Innova Captab’s Jammu plant has expanded the company’s market reach to include injectables and liquid formulations. JM Financial projects a bright future with expected compound annual growth rates (CAGR) of 29% in revenue, 33% in EBITDA, and 34% in PAT from FY25 to FY28. —
Fortis Healthcare: Strong Fundamentals in Healthcare
In the healthcare sector, Fortis Healthcare is another key recommendation for investors. JM Financial maintains a Buy rating with a target price of Rs 810, suggesting a potential upside of 20.5%. Fortis Healthcare delivered solid financial results for Q4FY25, showing notable growth in revenue (12%), EBITDA (14%), and adjusted PAT (28%) year-on-year.
The hospital business segment grew by 14.2%, while diagnostic services saw a 3% increase. The firm forecasts that Fortis will sustain over 15% topline growth over the next three years, supported by a 200-300 basis points margin expansion. Additionally, JM Financial expects free cash flows from the hospital chain to reach Rs 39.8 billion over this period. The stock currently trades at a forward EV/EBITDA multiple of 26.2, with potential for positive re-rating amid improving business fundamentals.
Oil India: A Strong Dividend Play in the Energy Sector
JM Financial also keeps a Buy call on Oil India, a public sector oil major, with an unchanged target price of Rs 500 — indicating a 17.1% upside potential. Although standalone Q4FY25 EBITDA fell below estimates at Rs 21.3 billion due to increased expenses, crude sales volumes surpassed expectations by 4%, and the Numaligarh Refinery Limited (NRL) achieved a gross refining margin (GRM) of $9.3 per barrel, boosting profitability.
The company reported a consolidated EPS of Rs 40.3 for FY25, with projections of approximately 13% CAGR earnings growth over the next three to five years. Highlighting Oil India’s appeal as a robust dividend stock, the brokerage notes yields between 4-5%. The stock trades attractively at 6.3 times FY27 estimated EPS, supported by a rise in the value of its listed investments.
Power Grid Corporation: Positive Outlook Amid Infrastructure Expansion
The power sector giant Power Grid Corporation is the fourth recommendation from JM Financial. The firm assigns a Buy rating with a target price of Rs 341, reflecting an upside potential of about 19.3%. Q4FY25 revenue remained flat at Rs 123 billion, while EBITDA reached Rs 102 billion with an impressive margin of 83.3%, despite higher employee and finance costs. Adjusted PAT declined to Rs 41 billion primarily due to these elevated expenses.
The brokerage highlights that nine Transmission System Agreement (TBCB) projects are over 90% complete and are expected to be commissioned in FY26. Capital expenditure is forecasted to exceed Rs 250 billion in FY26, driven largely by progress on High Voltage Direct Current (HVDC) projects. JM Financial emphasizes that although large transmission projects present execution challenges, they offer consistently rewarding returns. The firm expects improved capitalisation and earnings growth visibility, making Power Grid a compelling long-term investment.
Summary
JM Financial’s diversified top four Buy recommendations — Innova Captab (pharma), Fortis Healthcare (healthcare), Oil India (energy), and Power Grid Corporation (power transmission) — demonstrate promising prospects driven by strong quarterly results, strategic expansions, and robust future earnings and cash flow projections. Investors looking for multi-sector opportunities with solid growth and dividend potential may consider these stocks as they offer attractive upside and align with improving sector fundamentals.
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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a financial advisor before making investment decisions.