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

Investors looking for actionable insights should keep a close eye on several key players in the Indian market today. Major global brokerage firms including JP Morgan, Nomura, and CLSA have issued significant ratings and target prices for prominent companies across the finance, FMCG, and retail sectors.

Bajaj Finance: Strong Growth and Disciplined Scale

JP Morgan has maintained an "overweight" rating on Bajaj Finance, setting a target price of Rs 1,080. Following a recent management meet, analysts highlighted three critical pillars of strength for the NBFC. First, despite global macroeconomic headwinds like rising oil prices and supply chain disruptions, the company's ground-level growth momentum remains robust.

Second, the company’s asset quality remains healthy. Metrics such as bounce rates and collection efficiency are stable across all loan segments, showing no negative impact from the West Asia conflict. Finally, regarding Net Interest Margins (NIMs), management is confident in delivering a controlled NIM decline of 10-12 basis points by FY27. Driven by AI-led operating cost leverage and declining credit costs, analysts project a 26% earnings CAGR over the FY26-FY28 period.

Varun Beverages: Strategic Expansion via Asahi Partnership

CLSA has issued a "high conviction outperform" rating for Varun Beverages (VBL), with a target price of Rs 654. The bullish sentiment is fueled by a strategic partnership with Asahi Group Holdings to introduce the CALPIS brand to India. CALPIS is a century-old Japanese fermented milk-based beverage.

Under this alliance, Asahi will lead product development and technical support, while VBL will utilize its massive manufacturing base and cold-chain distribution network to manage marketing and brand operations in India. This move allows VBL to enter the premium fermented dairy-based ready-to-drink (RTD) sub-segment, diversifying its existing portfolio significantly.

Nykaa: Ambitious Revenue and Margin Guidance

Nomura has issued a "buy" rating on Nykaa, targeting a price of Rs 317. Insights from the company's recent investor day suggest a highly optimistic roadmap for the next few years. Nykaa has provided strong guidance for FY30, aiming to grow its revenue by 2.5x to 3x.

Furthermore, the company intends to expand its EBITDA margins to the early or mid-teens by FY30. As consumer preferences shift toward discovery-led, new-age brands, Nykaa is well-positioned to capture premium lifestyle spending through its content ecosystem and robust owned-brand portfolio.

Jubilant Foodworks: Navigating Margin and Delivery Dynamics

Citigroup has issued a "buy" rating 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, analysts do not see this as a sign of fundamental demand weakness.

Management expects Domino’s India like-for-like (LFL) growth to remain in the 5–7% medium-term range. To counter cost inflation, the company is implementing calibrated pricing and menu mix actions, aiming for a 200bps standalone margin expansion between FY24 and FY28. Additionally, the brand is focusing on refurbishing 400–500 Dine-In/Take-Away (DITA) heavy stores to drive recovery in the dining segment.

Key Takeaways

  • Bajaj Finance is projected to achieve a 26% earnings CAGR (FY26-FY28) supported by strong asset quality and AI-driven cost efficiencies.
  • Varun Beverages is expanding its portfolio into the premium dairy-based beverage segment through a strategic tie-up with Japan's Asahi Group.
  • Nykaa has set aggressive FY30 targets, aiming for a 2.5x to 3x revenue increase and significantly improved EBITDA margins.