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Nykaa: Should investors buy the stock, post steep correction?

Going ahead, investment in new initiatives would restrict margin improvement and we expect Nykaa’s EBITDA margins in FY23 to remain below the FY21 levels. The fashion business is expected to remain loss-making at the EBIDTA level in the near term

November 24, 2022 / 10:40 AM IST
Nykaa: Should investors buy the stock, post steep correction?

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

Highlights Top-line growth strong due to product launches/brand collaborations Investment in new businesses to restrict margin improvement Difficult to scale up fashion business profitably in near term Strong growth for online BPC business, but competition increasing FSN E-commerce Ventures (Nykaa; CMP: Rs 171.6; Market cap: Rs 48,890 crore) posted a double-digit revenue growth in Q2FY23, led by the beauty & personal care (BPC) and the fashion segments. Other businesses also scaled up. The EBITDA margins improved both year on year (YoY) as well as quarter...

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