Nykaa-parent FSN E-Commerce Ventures Ltd. has received largely bullish responses after its second quarter results with four price target hikes and three 'buy' and equivalent ratings. However, Citi still remains skittish.
HSBC, Kotak, Jefferies have retained 'buy' and similar ratings for the stock while hiking price targets for Nykaa as they expect premiumisation to sustain growth momentum going ahead.
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BofA remains 'neutral' on the omnichannel company but has also raised its price target. Citi, on the other hand, has retained its 'sell' rating for Nykaa's stock and reduced its price target to Rs 260 from Rs 265 highlighting that high valuations and marketing expenditure constrain attractiveness despite improving margins.
Here is a look at the Q2 financial fine print for Nykaa
- Net profit at Rs 101 crore vs Rs 34 crore YoY
- Revenue up 28.1% at Rs 3,006 crore vs Rs 2,346 crore YoY
- EBITDA up 65.6% at Rs 263 crore vs Rs 159 crore YoY
- EBITDA margin at 8.7% vs 6.8% YoY
Brokerage Takes
HSBC on Nykaa
- Maintain Buy; hike TP to Rs 410 from Rs 380
- Beauty growth, premiumisation and House of Nykaa brands support sustained customer engagement
- Fashion profitability and improving marketing efficiency offer further margin expansion
- Nykaa Now, advertising income and owned-brand acquisitions provide additional growth opportunities
Kotak on Nykaa
- Maintain Add; hike TP to Rs 385 from Rs 370
- Beauty customer acquisition and premiumisation should sustain growth momentum
- Fashion profitability and operating leverage support further margin improvement
- Higher owned-brand contribution and marketing efficiency strengthen earnings prospects
Citi on Nykaa
- Maintain Sell; cut TP to Rs 260 from Rs 265
- Expects revenue and EBITDA CAGR of 25% and 44% respectively over FY26–28
- Owned brands, premiumisation and omnichannel expansion remain key growth drivers
- High valuations and marketing expenditure constrain attractiveness despite improving margins
BofA on Nykaa
- Maintain Neutral; hike TP to Rs 400 from Rs 370
- Beauty growth supported by customer acquisition, premiumisation and repeat purchases
- Nykaa Now and advertising income offer additional growth opportunities
- Fashion marketing efficiency to improve margins, though premium valuations limit rerating
Jefferies on Nykaa
- Maintain Buy; hike TP to Rs 415 from Rs 400
- Beauty premiumisation, customer acquisition and own brands remain key growth drivers
- Nykaa Now targets over 25 cities by FY27-end; fashion targets high-single-digit EBITDA margins by FY30
- Simply Nam acquisition and L'Oréal partnership expand beauty portfolio; hikes FY28–29 EBITDA estimates by 5–6%
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