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

As Indian markets navigate shifting macroeconomic landscapes, major brokerage firms have released critical updates on several high-profile stocks. From long-term earnings projections for Nykaa to strategic brand expansions for Varun Beverages, these updates provide essential insights for investors tracking growth momentum.

Bajaj Finance: Sustained Momentum and AI Integration

JP Morgan has maintained an "overweight" rating on Bajaj Finance with a target price of Rs 1,080. Following a recent management meet, analysts highlighted three key pillars driving confidence in the NBFC giant. First, despite global supply chain disruptions and rising oil prices, the company's on-ground growth momentum remains robust. Second, asset quality remains stable, with collection efficiency and bounce rates showing no adverse impact from geopolitical tensions in West Asia.

Furthermore, the company is confident in managing its Net Interest Margins (NIMs), guiding for only a 10-12 basis points decline by FY27 despite tight liquidity. Analysts expect a 26% earnings CAGR over the FY26-FY28 period, fueled by healthy loan growth, declining credit costs, and operating cost leverage driven by new AI initiatives.

Varun Beverages: Strategic Expansion with CALPIS

CLSA has issued a "high conviction outperform" rating for Varun Beverages (VBL), setting a target price of Rs 654. This bullish outlook follows a strategic partnership with Japan’s Asahi Group Holdings to bring the CALPIS brand to India. CALPIS is a century-old, fermented milk-based beverage that will serve as a premium, differentiated offering in the ready-to-drink (RTD) segment.

Under this alliance, Asahi will manage product development, while VBL will leverage its massive manufacturing base and extensive cold-chain distribution network to handle marketing and sales. This move allows VBL to capture a unique niche similar to a premium lassi sub-segment.

Nykaa: Aggressive Growth Targets for FY30

Nomura has issued a "buy" recommendation for Nykaa with a target price of Rs 317, following the company's investor day. Nykaa has laid out an ambitious roadmap for FY30, aiming to grow its revenue by 2.5x to 3x. Additionally, the company expects to expand its EBITDA margins into the early-to-mid-teens by the end of the decade.

The growth thesis rests on the shift in consumer behavior toward discovery-led, new-age brands. Nykaa is well-positioned to capture a disproportionate share of premium lifestyle spending through its integrated content ecosystem and strong portfolio of owned brands.

Jubilant Foodworks: Navigating Margin and Dine-in Recovery

Citigroup has maintained a "buy" on Jubilant Foodworks with a target price of Rs 650. While the company faced some deceleration in the January-March quarter due to high base effects and lower free-delivery thresholds, management clarifies this was not a sign of demand weakness.

Domino’s India is expected to maintain like-for-like (LFL) growth in the 5–7% medium-term range. To drive recovery, the company is refurbishing 400–500 "Dine-In/Take-Away" (DITA) heavy stores to enhance the customer experience. Analysts also note that management is confident in achieving a 200bps standalone margin expansion between FY24 and FY28, supported by calibrated pricing actions to offset cost inflation.

Key Takeaways

  • Bajaj Finance is projected to achieve a 26% earnings CAGR through FY28, supported by strong asset quality and AI-driven cost efficiencies.
  • Varun Beverages is diversifying its portfolio into the premium fermented dairy segment through a strategic tie-up with Asahi Group.
  • Nykaa has set bold FY30 targets, aiming for a 2.5x to 3x revenue increase and significantly improved EBITDA margins.