With crude oil prices back at pre-war levels, a fresh note by Jefferies has outlined a clear pairs trade for Indian equity investors: accumulate underperforming oil marketing companies, cement leaders, a financial holding company and a leading two-wheeler maker, while trimming exposure to BSE and pharma exporters that have already seen a strong run-up.
BPCL and IOCL are the brokerage's top calls among the underperformers. Both stocks have lagged the broader market significantly since late February, even as the crude backdrop turned sharply in their favor. Jefferies sees lower oil prices and resilient gross refining margins as the twin supports for a structural re-rating. "We continue to highlight BPCL and IOCL as our preferred ideas, supported by a favourable backdrop of lower crude prices and resilient gross refining margins," the brokerage noted in its strategy report.
Similarly, the brokerage points to the cement sector as another underperformed pocket where cost headwinds are now in the rear-view mirror.
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Bajaj Finserv is the other conviction buy. The brokerage prefers it over Bajaj Finance at this point in the cycle, arguing that holding company discounts naturally narrow as markets strengthen and investors hunt for cheaper proxies for quality. "At Finserv, core profits remain robust, with an estimated ~23% CAGR over FY26-29, and the current holdco discount of ~27% vs. avg 17%, makes valuations attractive," Jefferies says. TVS Motor rounds out the buy basket, with underlying auto demand continuing to surprise positively and moderating commodity prices expected to provide incremental margin support.
Jefferies India stock calls in June, 2026
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On the sell side, BSE is Jefferies' clearest funding call. The stock has surged 43% since late February, outperforming MSCI India by a massive 45 percentage points, a run the brokerage has remained highly cautious on since the fourth quarter. Derivatives activity has moderated alongside a lower VIX, and while persistent enthusiasm around the NSE IPO has kept valuations elevated, Jefferies does not see that market energy as a sufficient fundamental justification.
Pharma exporters complete the funding side of the ledger. While the sector previously outperformed the MSCI India index by an average of 11 percentage points, a strengthening rupee is transitioning from a past tailwind into an active headwind. Consequently, Jefferies carries underperform ratings on major exporters like Cipla, Dr. Reddy's, and Lupin, where key products face steady erosion, while remaining positive only on Zydus Lifesciences within the major export basket.
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