Top Stocks to Watch: Bajaj Finance, Nykaa, and Varun Beverages

As the Indian markets navigate shifting macroeconomic trends, several key listed companies are coming under the scanner of major global brokerages. Following recent management meets and investor days, analysts from JP Morgan, Nomura, and CLSA have highlighted high-conviction opportunities across the NBFC, consumer goods, and retail sectors.

Bajaj Finance: Strong Growth Amid Macro Headwinds

JP Morgan has maintained an 'Overweight' rating on Bajaj Finance with a target price of Rs 1,080. Despite concerns regarding global oil prices and supply chain disruptions, analysts noted that the company’s ground-level growth momentum remains robust.

A critical highlight from the management meet was the company’s resilient asset quality. Collection efficiency and bounce rates remain benign across all loan segments, showing no significant impact from geopolitical tensions in West Asia. Furthermore, despite a tight liquidity environment and rising funding costs, the company is confident in its guidance for a manageable 10-12 basis points decline in Net Interest Margins (NIMs) by FY27. With AI-driven operating cost leverage and declining credit costs, analysts project a 26% earnings CAGR over the FY26-FY28 period.

Nykaa: Ambitious Vision for FY30

Nomura has issued a 'Buy' rating on Nykaa with a target price of Rs 317, following insights from the company's recent investor day. Nykaa has laid out an aggressive roadmap for the next few years, aiming for a 2.5x to 3x revenue growth by FY30.

The company is also targeting an expansion of its EBITDA margins into the early-to-mid-teens by the end of the decade. Analysts believe Nykaa is uniquely positioned to capture a larger share of premium lifestyle spending as consumer preferences shift toward discovery-led, new-age brands. Nykaa’s integrated content ecosystem and its growing portfolio of owned brands act as significant moats in this transition.

Varun Beverages: Strategic Expansion through CALPIS

CLSA has assigned a 'High Conviction Outperform' rating to Varun Beverages (VBL) with a target price of Rs 654. The optimism stems from a strategic partnership with Asahi Group Holdings to manufacture and distribute the CALPIS brand in India.

CALPIS, a century-old Japanese fermented milk-based beverage, allows VBL to enter the premium ready-to-drink (RTD) dairy segment. This move leverages VBL's existing manufacturing prowess and extensive cold-chain distribution network. The alliance is seen as a way to add a highly differentiated product to VBL's current portfolio, strengthening its footprint in the beverage market.

Citigroup has issued a 'Buy' rating on Jubilant Foodworks with a target price of Rs 650. While the company faced some deceleration in the Jan-March quarter due to high base effects and lower free-delivery thresholds, management remains optimistic.

Domino’s India is expected to maintain a medium-term like-for-like (LFL) growth range of 5–7%. To counter cost inflation, the company is implementing calibrated pricing and menu actions, aiming for a 200bps standalone margin expansion between FY24 and FY28. Additionally, the company is focusing on refurbishing 400–500 dine-in/take-away heavy stores to revitalize the physical dining experience.

Key Takeaways

  • Resilient Financials: Bajaj Finance shows strong momentum with an expected 26% earnings CAGR for FY26-FY28, supported by stable asset quality.
  • Aggressive Scaling: Nykaa is targeting a massive 2.5x-3x revenue increase by FY30 by leveraging its premium lifestyle platform.
  • Product Diversification: Varun Beverages is expanding into the premium fermented dairy segment through its strategic partnership with Japan's Asahi Group.