Nykaa - Margin Outlook Clarity Surfaces: ICICI Securities

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..ICICI Securities Report.In our preview note, we had flagged certain questions. FSN E-Commerce Ventures Ltd. (Nykaa), in its investor day presentation, has touched upon most of them. Management clarified that it is now focusing on growth in the core beauty and personal care segment and will reinvest savings from scale efficiencies to usher growth higher. Hence, medium-term BPC contribution/Ebitda margins will likely stay flattish. Although short of street’s expectations, the sharp profit improvement outlook in fashion/eB2B segments is a positive surprise. Also, the rapid scale up of its global store and some of its owned brands – ‘Dot & Key’ and ‘Nykd’ – were definite bright spots in Nykaa’s operating performance. We reckon, while material re-rating of Nykaa is contingent on the execution of its ambitions, clarity on growth/margin outlook should benefit the stock. Upgrade to Add from Hold..Key risks On the upside:Ad-revenue recovery which would boost profitability. Faster-than expected profit delivery in fashion vertical. On the downside:Chasing growth at elevated levels can be dilutive of gross margin. Success in fashion business can be difficult given higher competition in the category.Increase in competitive intensity from other channels (quick commerce) and other players (Tira/Purplle) in the BPC segment..Click on the attachment to read the full report:.Praj Industries - Gearing Up To Become A Bio-Economy Leader: Prabhudas Lilladher.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Nykaa - Margin Outlook Clarity Surfaces: ICICI Securities

Upgrades Nykaa to Add, from Hold, and revises DCF-based price target to Rs 195 from Rs 175, as we roll forward.

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