Archive · 9 Oct 2026
Jefferies Names Top Stocks as Commodity Costs Pressure Q2 Margins
Companies are getting ready to report how they did in the September quarter.
Jefferies expects their sales to grow, but profits may not grow as quickly.
That is because materials and other costs have risen.
The firm expects margins, the share of sales left after costs, to come under pressure.
It highlighted Polycab India, LG Electronics India and V-Guard Industries as preferred stocks.
Polycab may sell more partly because it can charge higher prices for its products.
LG could benefit from demand for consumer products, including air conditioners.
Jefferies is more cautious about some electronics manufacturers because their costs may rise while shoppers spend less.
The report’s forecasts are brokerage views, not guaranteed results or investment advice.
Jefferies expects 16% year-on-year sales growth but only 10% EBITDA growth across its diversified coverage in Q2FY27.
Higher commodity costs and supply-chain pressure are expected to reduce operating margins by about 50 basis points year-on-year.
Polycab India, LG Electronics India and V-Guard Industries are Jefferies’ highlighted stock picks.
Jefferies expects Polycab sales to rise 18–20%, largely due to pricing, while its operating margin is estimated at 13.5% and expected to decline year-on-year.
The brokerage is cautious on electronics manufacturing services companies, citing memory costs, weaker discretionary spending and a high comparison base.
- Who
- Jefferies and companies in its diversified coverage, including its highlighted stock picks.
- What
- The brokerage forecast sales and earnings trends for Q2FY27 and named Polycab India, LG Electronics India and V-Guard Industries as preferred stocks.
- When
- Q2FY27, the September quarter; the article was published during the start of the earnings season.
- Where
- India.
- Why
- Higher commodity costs and supply-chain pressures may weigh on margins even as demand, price increases and premium products support sales.
- Expected sales growth
- 16% year-on-year across Jefferies’ diversified coverage in Q2FY27.
- Expected EBITDA growth
- 10% year-on-year across the coverage.
- Expected margin pressure
- Operating margins are expected to decline by around 50 basis points year-on-year.
- Highlighted picks
- Polycab India, LG Electronics India and V-Guard Industries.
- Polycab sales forecast
- 18–20% year-on-year growth, largely driven by pricing.
- Polycab margin estimate
- 13.5%, with a year-on-year decline expected.
- EMS outlook
- Jefferies expects pressure from higher memory costs, weaker discretionary spending and a high year-ago base.