Motilal Oswal has started covering Nykaa, the popular online beauty retailer, and gave it a neutral rating with a target price of Rs 280 per share. That target suggests the stock could rise about 10% from its recent close.
Nykaa commands roughly 27% of India's online beauty and personal care (BPC) market, making it the leading specialist platform in the space. The company relies on a strong brand, content‑driven discovery, and a curated product range, which sets it apart from discount‑focused e‑commerce sites.
Online penetration in the BPC segment is expected to climb from about 22% in FY25 to roughly 35% by FY30. As consumers shift toward premium skincare, fragrances and cosmetics, Nykaa’s focus on high‑end items positions it well to capture this demand.
Motilal Oswal used a sum‑of‑the‑parts method. It applied a 50× EV/EBITDA multiple to the BPC business, valuing that segment at Rs 255 per share. The fashion side was valued with a discounted cash‑flow model, adding about Rs 31 per share. Together, these give a target of Rs 280.
Even though the long‑term fundamentals look solid, the brokerage believes much of the upside is already reflected in the current price. Hence, the neutral rating reflects a balanced risk‑reward profile.
At around 10:10 am, Nykaa shares were flat but slightly down, trading at Rs 252.20 on the BSE.
Remember, this is just an analysis, not a prediction. Do your own research and consider your personal financial situation before making any investment decisions.
Download the TradeKaizen app to practice F&O trading with real-time market data anytime, anywhere.
Get it on Google PlayConnect with fellow traders, share strategies, and improve your trading skills in our Telegram group.
Join Telegram