HSBC has upgraded M&M Financial Services to a 'buy' rating from 'hold' and raised its price target to ₹410 per share from ₹320, indicating an upside potential of 17.9% from its previous close of ₹360.05. Similarly, the brokerage upgraded FSN E-Commerce Ventures Ltd. (Nykaa) to 'buy' and increased the price target to ₹380 per share from ₹273, showing an upside potential of 15.7% from its previous closing price of ₹328.45. According to reports from CNBC TV18, HSBC had a 'hold' rating on both stocks earlier, and the upgrades were driven by strong execution and improved fundamentals.
HSBC highlighted Nykaa's position as an undisputed leader in online beauty and personal care (BPC) and noted its growing share in the fashion segment. The brokerage raised its estimates for Nykaa's financial year 2028 Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) by 12% led by margin delivery conviction in Beauty and Personal Care and higher growth in the fashion vertical. As reported by CNBC TV18, Nykaa's current market share in both online BPC and premium online fashion provides visibility of growth sustaining even beyond financial year 2030. Of the 26 analysts covering Nykaa, 15 have 'buy' ratings, six have 'hold' ratings, and five have 'sell' ratings, with consensus estimates implying a downside potential of 7%.
M&M Financial Services reported robust first quarter earnings on Tuesday, with consolidated net profit increasing 75.3% to ₹927.5 crore from ₹529 crore last year. The company's net interest income (NII) was up 18% to ₹2,580 crore from ₹2,188 crore in the previous year. According to CNBC TV18, HSBC's upgrade was driven by the company's stronger execution in fees, operating expenses and asset quality. The brokerage increased its earnings per share estimates for financial year 2027-2029 by 33%-37% to reflect faster disbursements growth, stronger fees and lower expenses. Of the 38 analysts covering M&M Financial Services, 26 have 'buy' ratings, 10 have 'hold' ratings, and two have 'sell' ratings, with consensus estimates implying an upside potential of only 3.4%.
While HSBC maintains its bullish stance with a 27% upside potential, other brokerages present mixed views on M&M Financial Services. Jefferies maintained its 'hold' rating with a target price of ₹365, citing the company's June quarter profit after tax of ₹8.9 billion, which rose 70% year-on-year and exceeded its estimate of ₹8.7 billion. However, Jefferies noted that assets under management grew 12.7% year-on-year while net interest margins declined sequentially, and expects gradual improvement in AUM growth due to near-term risks from weak monsoon. Nomura reiterated its 'buy' rating with a higher target price of ₹415, noting the company managed the seasonal quarter well with healthy asset quality trends, though it flagged monsoon deficit as a key risk for FY27.
