Jefferies prefers Polycab India Ltd., Amber Enterprises India Ltd., Voltas Ltd., and Crompton Greaves Consumer Electricals Ltd. in India's small and midcap space. Recent correction provides a good opportunity to evaluate stocks in this category, according to the brokerage.
In calendar year 2025, India's small and midcap stocks corrected more than the large-caps. The NSE Midcap declined 16% year-to-date, compared to a 5% decline in the NSE Nifty 50, Jefferies said.
The brokerage is positive on emergency medical services section, capital expenditure-dependent segments, and companies who cater to needs of summer. It expects capital expenditure recovery in the first half of CY2025. Revenue management process of companies is a key monitorable for small and midcap companies.
Polycab
Polycab India Ltd. has a 'buy' rating with a target price of Rs 6,485, which implies a 29.18% upside from Monday's closing price. Jefferies sees no impact on its financials over the period of financial year 2025 and 2027. It estimates 22% and 28% sales and profit CAGR for the period mentioned above. This growth will be driven by cables and wires, new orders, and fast moving electrical goods.
The medium term outlook of Polycab India is quite healthy, according to Jefferies. High stock-keeping-unit count in cables and wires and entrenched distribution have catalysed market share gains.
Amber Enterprises
Amber Enterprises India Ltd. also has a 'buy' rating from Jefferies with Rs 8,845 as target price. The current target price implies 36.1% upside from Monday's closing price. For the period between financial year 2025 and 2027, Amber Enterprises is expected to deliver over 30% and 36% sales and Ebitda, according Jefferies.
The company can be viewed as a demand aggregator for the under-penetrated domestic air condition industry. The company will be able to fetch new customers and orders in electronics because of imposition of 30% anti-dumping duty in 2024 on printed circuit boards, Jefferies said.
It expects Amber Enterprises' capital expenditure to normalise. However, any increase in capital expenditure will be a key monitorable, the brokerage said.
Crompton Greaves Consumer Electricals
Crompton Greaves Consumer Electricals Ltd. has a 'buy' rating with a target price Rs 480 apiece, which implies a 36.13% upside from Monday's closing price. The target price is at 40 times premium to historical average.
Jefferies expects Crompton Greaves Consumer Electricals to deliver an estimated 22% earning per share CAGR over financial year 2024 and 2027. The company is sustaining growth rates in engineering, capital, and design, and lighting, which is coupled with good profitability. Fans vertical is now at 25% premium, compared to 12–15% premium to historical average.
In the upcoming summer, management expects a double digit growth in premium, and single-digit in mass premium, Jefferies said.
Voltas
Jefferies has a 'buy' rating on Voltas with a target price Rs 1,990, which implies 36.35% upside from Monday's closing price. Voltas will likely deliver over 21% and 31% sales and net profit CAGR over financial years 2025 and 2027, on the back of growth in room and air conditioning volumes and EPC margin turnaround and traction in Voltas-Bekko.
Jefferies expects Voltas' growth to normalise in the fourth quarter of financial year 2025, compared to first nine months because of high base. Domestic air condition industry's compressors stock could possibly cater to estimated over 25–30% on the year demand growth.
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