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Motilal Oswal Report

Motilal Oswal broadly maintain its estimates for FSN E-commerce Ventures Ltd., as underlying business trends remain largely in line with expectations. The beauty business continues to show steady growth and improving unit economics, supported by owned brands and advertising monetisation, while fashion is showing early signs of recovery with breakeven visibility emerging. Nykaa should report a PAT margin of 3.4%/4.4% in FY27/28E. 

The brokerage values Nykaa on an SoTP basis. For the beauty and personal care business, the brokerage assigns a 50x EV/Ebitda multiple, reflecting category leadership, relatively better margins versus horizontal platforms, and improving earnings visibility, implying a pershare value of Rs 260.

For the fashion business, Motilal Oswal uses a DCF-based approach, implying a per-share value of Rs 29. Adjusting for net debt, it arrives at a target price of Rs 290.

Following the strong share price performance over the past year, Motilal Oswal believes the near-term risk-reward appears balanced. Hence reiterates Neutral rating on the stock.

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