Nykaa Gets HDFC Securities 'Reduce' Rating — Here's Why

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HDFC Securities Institutional Equities

While FSN E-Commerce Ventures Ltd. remains an efficient online business, especially in the beauty and personal care segment, its success in part is due to the absence of potent competitors (a fact that is gradually changing).

Fashion remains a WIP and its path to profitability remains unclear (despite the stated ambition). Ex-ad income, the lack of non-linear monetization levers forces us to restrict our valuation compass somewhere between a linear business and a pure platform.

Our Reduce rating on Nykaa holds with a DCF-based target price of IRs 180/share (implying 62x Jun-27 EV/Ebitda).

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