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Nykaa Q1 Review: Premiumisation Drives Growth, But Valuations Keep Motilal Oswal Cautious — Check Revised Target Price

Motilal Oswal believes beauty and personal care should continue to deliver mid-to-high 20% NSV growth, supported by premiumisation, improving average order values, owned brands, and healthy customer additions, while Nykaa's margins should gradually improve despite continued reinvestment.

Nykaa Q1 Review: Premiumisation Drives Growth, But Valuations Keep Motilal Oswal Cautious — Check Revised Target Price
Nykaa shares could remain in focus after the beauty and fashion platform reported a strong set of Q1 numbers, driven by robust growth in both its BPC, fashion businesses.
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STOCKS IN THIS STORY
FSN E-Commerce Ventures Ltd
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NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

FSN E-Commerce Ventures Ltd. (Nykaa) shares could remain in focus after the beauty and fashion platform reported a strong set of Q1 FY27 numbers, driven by robust growth in both its beauty and personal care (BPC) and fashion businesses.

While Motilal Oswal has raised its earnings estimates following the earnings beat, the brokerage has retained its 'Neutral' rating and target price of Rs 370, citing valuation concerns despite improving fundamentals.

Motilal Oswal believes BPC should continue to deliver mid-to-high 20% NSV growth, supported by premiumisation, improving average order values, owned brands, and healthy customer additions, while margins should gradually improve despite continued reinvestment.

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Fashion is also showing structural improvement, with stronger growth and sustained Ebitda breakeven.

The brokerage now expects Nykaa to report a PAT margin of 3.7%/4.8% in FY27/28E, and raises its estimates by ~14.8%/17.8% for FY27/FY28, driven by stronger fashion growth and better margin expectations across both neauty and fashion.

Click on the attachment to read the full report:

Mosl Nykaa.pdf
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