Nykaa Company
Nykaa’s parent company FSN E-Commerce Ventures Ltd. There was a strong rise in the shares of for the third consecutive trading session on Friday. The roadmap till 2030 presented in the company’s ‘Investor Day’ has strengthened the confidence of investors and market analysts. After this, buying in shares increased and the stock reached record high. Many major brokerage firms have maintained their positive stance on the company.
Global brokerage Nomura has maintained its ‘Buy’ rating on Nykaa and set the target price of the stock at Rs 317. The brokerage believes that the company may see strong growth in both sales and profits in the coming years. Nykaa aims to grow its revenue by 2.5 to 3 times the current level by FY30 and reach EBITDA margin in the range of 10 to 15 percent.
Preparation for major expansion by FY30
According to the company, the demand for premium beauty, wellness and lifestyle products is increasing rapidly in India. Nykaa wants to capitalize on this opportunity through its strong digital platform, content ecosystem and private brand portfolio. Nomura believes that the changing preferences of customers and the increasing popularity of new brands are creating a favorable environment for the company.
Jefferies has given this target
On the other hand, Jefferies has also given a target price of Rs 350 while maintaining ‘Buy’ rating on Nykaa. According to the brokerage, the company’s FY30 roadmap is certainly ambitious, but it can be achieved. Nykaa aims to increase its gross merchandise value (GMV) by 2.5 to 3 times to more than $5 billion by FY30. There is also a plan to increase EBITDA by 4 to 5 times and take the Return on Capital Employed above 40 percent.
Focus will be on beauty, wellness and fashion
Jefferies believes that Nykaa’s beauty business will be strengthened by its omnichannel strategy, advertising revenue and fast delivery capabilities. At the same time, the wellness segment is also being considered as a major basis for the future growth of the company, because the share of high margin products is increasing in it.
In the fashion business, the company is emphasizing on the expansion of selected products and new brands. Nykaa aims to achieve high single-digit margins in this segment in the next few years. Apart from this, the company is rapidly increasing the sales of its private brands not only on online platforms but also in offline and other channels.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
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