Hot stocks: Brokerage view on M&M, Nykaa and Sun Pharma

Brokerage firms have weighed in on top companies, with Kotak Securities upgrading M&M and highlighting recovery prospects in the tractor industry.
Jefferies remains bullish on Nykaa, praising its growing influence in India’s beauty market. Meanwhile, JPMorgan and UBS offer insights on Sun Pharma's legal hurdles, projecting potential outcomes for its specialty drug launch.

We have compiled a list of recommendations from top brokerage firms, sourced from ETNow and other outlets

Kotak Securities on M&M: Buy | Target price: Rs 3,150

Kotak Securities has upgraded M&M from Add to Buy and lowered the target price to Rs 3,150 from Rs 3,300.

The tractor industry is poised for recovery in H2, and the company is well-positioned despite a slowdown in the domestic passenger vehicle segment. While demand trends in the LCV segment remain muted, M&M continues to perform well across all three segments, with improvements in return ratios. M&M remains Kotak Securities’ top pick.

Jefferies on Nykaa: Buy| Target price: Rs 220

Jefferies has maintained a buy rating on Nykaa with a target price of Rs 220. The Jefferies team recently attended a three-day beauty festival in Mumbai, featuring over 80 brands and more than 1,000 content creators. They described Nykaaland 2.0 as India’s one-of-a-kind beauty festival. The event attracted over 25,000 visitors, and around 400,000 samples were distributed. Brands expressed pleasant surprise at the turnout and the level of user engagement.

As grooming and makeup habits evolve, India is emerging as a key growth market, with brands considering Nykaa an indispensable partner.

JPMorgan on Sun Pharma

JPMorgan reported that Sun Pharma plans to appeal the judgment and may also consider settling with Incyte to expedite the product launch. In a worst-case scenario, the company would only be able to launch the product after its expiry in December 2026. The global brokerage firm assigned a net present value (NPV) of $546 million, or Rs 19 per share, for Leqselvi, assuming a launch in 2026.

A launch after CY26 would have a marginal impact on fair value, as the company would avoid paying royalties in that case. JPMorgan also believes that the specialty business has decent growth potential, projecting a 20% CAGR over FY24-27, driven by existing products such as Ilumya, Winlevi, and Cequa.

UBS on Sun Pharma

Preliminary injunction on Leqselvi is not the end of the opportunity. Settlement is still one of the possible options. Grant of PI implies Incyte could extract more value in a settlement scenario. Leqselvi launch could be delayed beyond FY25, but NPV may not change much.

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