Nykaa-parent FSN E-Commerce Ventures Ltd. has received mixed reactions and projections from global brokerages Jefferies and Macquarie after its first quarter results. The former has raised the target price to Rs 400 from Rs 350, while maintaining a 'buy' rating, after its "beautiful" Q1.
Jefferies cited strong beat across all financial metrics, expansion in the beauty segment on the back of premiumisation, higher average order value (AOV), and steady user growth as reasons for the bullish stance.
Further, the brokerage outlined that the e-commerce company's fashion segment grew over 50% growth with an Ebitda break-even, and house of brands continue to scale up while quick delivery widened its reach. Jefferies flagged a "punchy" valuation, but said that it is supported by strong growth and margin expansion.
On the other hand, Macquarie has maintained an 'underperform' rating on the stock, with a price target of Rs 220, which is noticeably lower than the current market price of Rs 342.50.
The brokerage outlined that while Nykaa's margins for both the beauty and fashion segments were in-line with expectations, the company has swapped disclosure of Gross Merchandise Value for its own beauty brands, with net sales value (NSV), making it difficult to analyse growth performance.
Macquarie was happy with Nykaa beauty's "healthy" gross margin growth on the back of improving mix, partnership with Nike, and a second sequential quarter of Ebitda breakeven. However, it remains vary of Dot & Key brand scale contraints pinching the beauty segment Ebitda built into consensus.
ALSO READ: Nykaa Q1 Results: Profit Soars Nearly 3.5x As Margins Expand, Revenue Jumps 29%
Nykaa Q1 FY27 (Cons, YoY)
- Net Profit rises 243.3% at Rs 80 crore versus Rs 23.3 crore (Estimate: Rs 83 crore).
- Revenue up 29% at Rs 2,782 crore versus Rs 2,155 crore (Estimate: Rs 2,762 crore).
- EBITDA rises 67.8% at Rs 236 crore versus Rs 140.7 crore (Estimate: Rs 230 crore).
- EBITDA Margin up 200 Bps at 8.5% versus 6.5% (Estimate: 8.3%).
The company's Ebitda margin expanded by 200 basis points to 8.5% from 6.5% a year ago, also coming in ahead of the Bloomberg consensus estimate margin of 8.3%.
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