Tips Music stock downgraded to 'Add' by JM Financial; check target price

JM Financial expects revenue growth to remain in the low-to-mid teens, as the company did not release any major new music content in Q3 and Q4 of FY26

JM Financial downgraded Tips Music Ltd. and cut its target price, citing muted revenue growth prospects due to the lack of meaningful new content releases.

 

The brokerage downgraded Tips Music to 'Add' from 'Buy' and cut its target price to ₹560 per share. JM Financial expects revenue growth to remain in the low-to-mid teens, as the company did not release any major new music content in the third and fourth quarters of the financial year 2026.

 

The downgrade also reflects JM Financial's view that Tips Music has not been able to meaningfully outperform industry growth as earlier anticipated, despite its strategic partnership with Warner Music and plans for aggressive content investments. 

 

 

Recent trends suggest a shift in music consumption from subscription-based music streaming platforms to YouTube, where per-stream realisations are significantly lower, the brokerage said. In addition, the company has not indicated any major content releases in the near future.

 

At the industry level, JM Financial noted that while over-the-top platforms continue to encourage users to move towards paid subscriptions, the pace of adoption remains slow and insufficient to materially accelerate revenue growth. 

 

On the margin front, JM Financial has raised its Ebit margin assumptions for FY26 and FY27 by 90-520 basis points, factoring in lower content costs due to fewer new releases. 

 

The brokerage expects Tips Music to report an Ebit margin of over 70 per cent in H2FY26, providing near-term earnings support. However, it cautioned that such high margins are not sustainable in the long run, as the business requires continuous investment in new music content.

 

Industry consolidation among music streaming platforms has increased the push towards paid subscriptions, which is structurally positive for content owners over the long term, the brokerage said. However, the pace of this transition remains gradual, with no meaningful acceleration in paid music consumption seen so far. 

Tips Music share price history

The company's stock rose as much as 2.1 per cent during the day to ₹529.2 per share. Tips Music stock snapped a four-day losing streak and currently trades at 2.1 times the average 30-day trading volume, according to Bloomberg. 

 

The counter has fallen 23.4 per cent this year, compared to a 9.5 per cent advance in the benchmark Nifty 50. Tips Music has a total market capitalisation of ₹6,748.23 crore. 

 

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(Disclaimer: The views and investment tips expressed by the brokerage in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.)