While its price target of Hindustan Unilever remains unchanged, Jefferies has significantly raised its price target on Asian Paints, while trimming its projections on Varun Beverages.
In fact, the brokerage has issued a double-upgrade on Asian Paints to “buy” from its earlier rating of “underperform” with its price target raised to ₹2,830 from ₹2,000 earlier.
Jefferies wrote in its note that several consumer firms have faced several issues in the past few quarters on growth, competition and margins, which weighed on their share prices.
As of Tuesday’s close, shares of Asian Paints are down 27% from their 52-week high, while those of Varun Beverages and HUL are down 33% and 21% respectively.
Most of the risks are factored in by these stocks and the brokerage sees a limited downside but a meaningful upside for these stocks, in case the tide turns.
For Asian Paints, Jefferies believes that while Birla Opus will continue to ramp-up, the easy gains are already captured and there will be a gradual recovery in earnings starting financial year 2026. Its ₹2,800 price target implies a potential upside of 12.6% from Tuesday’s close.
Hindustan Unilever has struggled over the last few years on various fronts, which reflects in its stock price that has gone nowhere, Jefferies wrote in its note. “The recent change in stance by the management of prioritising growth over margins along with the parent company’s high focus on India should set the stage for recovery,” the Jefferies note said.
Even though Jefferies highlights Varun Beverages as one of its contra picks, it has cut its Earnings Per Share (EPS) estimates by 9% to 10% on a June 2026 basis courtesy of a weak summer. Citing attractive valuations, Jefferies maintained its “buy” rating on the stock but cut its price target to ₹560 from ₹650 earlier.
The brokerage also warns that while these stocks are not cheap by any stretch of imagination, it does see a potential for a cyclical upturn in the fundamentals, which should drive up the share price. “In case our thesis does not play out, we think downside is limited from current levels,” the brokerage wrote.
