Can Tips Music's Rs 44 crore share buyback boost its share price? Here's what JM Financial says

JM Financial believes Tips Music's Rs 44.5 crore share buyback through the open market route is likely to support the stock price. The brokerage has maintained its 'Buy' rating, citing the company's high profitability, healthy revenue and earnings growth outlook, and multiple growth and monetisation opportunities.

The music company on Wednesday announced that its board approved a plan to buy back up to 5.9 lakh fully paid-up equity shares at Rs 750 per share through the open market route, implying a premium of nearly 12% from the stock’s previous closing price. Notably, this is one of the first buybacks announced via the open market route after the system was reintroduced by SEBI from August 1 onwards.

The open-market route implies that the company will purchase shares through the stock exchanges instead of inviting shareholders to tender shares at a fixed price, which happens in the tender offer route. Unlike the tender offer route, there is no record date or shareholder reservation, and participation is available to all shareholders selling through the market during the buyback period.


Also read | Tips Music announces Rs 44 crore buyback at 12% premium. Check details

JM Financial in its note highlighted that the buyback excludes promoters and promoter group participation, requires a minimum utilisation of 75% of the approved amount (Rs 33.38 crore) and forms part of management’s earlier commitment to distribute FY26 profit (Rs 216.7 crore) through a combination of dividends and buybacks.

"During the Q1 FY27 earnings call, management indicated that following the implementation of the revised open-market buyback framework, the board would evaluate the buyback proposal, reaffirming its commitment to shareholder returns. The current announcement fulfils that commitment through an open-market buyback route,” the domestic brokerage noted.

Tips Music's financials

JM Financial highlighted that the company reported a healthy Q1 performance, with revenue rising 21% YoY supported by growth across both digital and non-digital businesses. However, profitability was impacted by elevated content investments, with EBIT margin declining to 49% as content costs nearly doubled YoY following the release of 73 songs (55 film and 18 non-film), it noted.

Tips Music’s management reiterated FY27 guidance of 20% growth each in revenue and PAT while maintaining annual EBITDA margin guidance of 65–70% and content acquisition guidance of Rs 90-100 crore, the domestic brokerage added, further highlighting that management has said that the full revenue benefit from key releases launched during mid-May and June 2026 is expected Q2 FY27 onwards.

JM Financial has a target price of Rs 810 apiece on the shares of Tips Music, implying more than 20% upside potential from the stock’s previous closing price.

Tips Music share price

Tips Music shares fell over 3% to trade at Rs 651 apiece on Thursday afternoon. The stock has fallen around 2% in a week and more than 5% in a month, but is overall up 20% in 2026 so far.

In the longer term, Tips Music shares jumped more than 10% in a year and 118% in three years. However, they fell 44% in five years. The company has a market capitalisation of more than Rs 8,332 crore.

Also read | Tips Music reports 21 percent YoY revenue growth in Q1 FY27

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)