Shares of Nykaa's parent FSN E-Commerce Ventures Limited will be in focus on Friday, June 19 after as brokerages remained remained mixed over the e-commerce platform's latest outlook and investor day commentary.
Nykaa on Thursday, June 18 announced an ambitious five-year growth roadmap, estimating to double its business scale by FY30, led by expansion across beauty, fashion, offline retail and private labels. The beauty and fashion company said it aims to become a $5 billion-plus gross merchandise value (GMV) platform by FY30, roughly 2.5-3 times its current scale.
Growth is expected to be driven by both core beauty business and fashion vertical, with beauty GMV projected to grow 2.5-3 times and fashion GMV expected to expand 3-3.5 times over the period. Nykaa is also targeting revenue growth of 2.5x-3x by FY30 while aiming for EBITDA to increase 4x-5x. The company expects EBITDA margins to reach the early-to-mid teens over the next five years.
Here's what brokerages are saying
JP Morgan maintained neutral rating on Nykaa stock at a target price of Rs 270, a downside of 9.4% from its closing price of Rs 298.1. The global brokerage highlighted the company's focus on brand trust, superior assortment and disciplined execution. Citing stronger than expected Ebitda target, Macquarie reiterated 'underperform' with a target price of Rs 210, a downside of 29.5%.
Jefferies maintained 'buy' rating on Nykaa shares, emphasising on an impressive management meet It expects that the beauty section will compound via omnichannel, advertisements and faster fulfilment. The brokerage set a target price of Rs 350, marking an upside of 17.4%. Morgan Stanley reiterated 'overweight' on Nykaa and hiked target price to Rs 321, an upside of 7.6%. The brokerage expects positive management commentary and strong performance trends in recent quarters should drive to an upgrade in consensus earnings estimates.
ALSO READ: Nykaa Unveils Big FY30 Targets: $5 Billion GMV, 5x EBITDA Growth, Tier-3 Expansion
JPMorgan on Nykaa
- Maintain neutral with target price of Rs 270.
- Beauty moat deepens; fashion flywheel builds.
- Nykaa's focus remains on brand trust, superior assortment and disciplined execution.
- EBITDA margins are expected to expand to low-to-mid-teens by FY30.
- Ambitious medium-term growth aspiration stated by the company will support premium stock multiples.
Macquarie on Nykaa
- Maintain underperform with target price of Rs 210.
- Stronger-than-expected target of 4-5x EBITDA over FY26-30E.
- Ebitda guidance suggests sharp beauty margin expansion.
- Remain concerned about acceleration in rest-of-beauty GMV growth momentum implied in the guidance.
- The scale constraints along with hurdles in expanding Dot & Key brand footprint in offline channels.
- See difficulty in replicating Dot & Key success.
Jefferies on Nykaa
- Maintain buy with target price of Rs 350.
- In an impressive analyst meet, management outlined an ambitious but credible glide path.
- Beauty to compound via omnichannel, ads, & faster fulfilment.
- Wellness to add premium, higher margin adjacencies.
- Fashion to ride on curation & brand expansion, with high single digit margins in 4-years.
- Own brands are a key growth pillar, with a rising off platform mix.
- The AI lever is central to the model.
Morgan Stanley on Nykaa
- Maintain overweight; hike target price to Rs 321.
- Management sounded optimistic on the premium beauty and fashion growth opportunity.
- Company is targeting revenue/GMV growth of 25% or higher across segments, with improving profitability.
- Positive management commentary and strong performance trends in recent quarters should drive to an upgrade in consensus earnings estimates.
ALSO READ: Nykaa Partners With OpenAI To Build AI-Native Beauty And Fashion Commerce
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