Last month, UBS Securtities India started coverage of Nykaa and has set a target price of Rs 2,750 for the one-year time frame.
After the listing, there has been a lot of interest from investors in the shares of Nykaa. However, after the listing, its shares have fallen continuously and it has fallen up to 27 percent this month. But JM Financial Service, a research and brokerage firm that recently started coverage of Nykaa’s parent company FSN E-commerce Ventures, has said that the online beauty product company’s shares could rally up to 27 per cent from their current level of Rs 2,480. The firm has given it a ‘Buy’ rating. The brokerage firm expects Nykaa’s beauty and personal care (BPC) category to continue to grow.
These are the big risks in front of the company
The brokerage firm says that Nykaa’s consumer engagement is very good in the beauty and personal care products and fashion categories. It has 13 million followers on social media and this can prove to be a partner for its advertising needs. However, the brokerage firm has also considered some risks in the way of the target price of 2480. He says that a fall in the fashion business can be a big risk. Nykaa is expanding itself and if it keeps the prices of its products low, then the margins may come down. Along with this, increasing competition in this segment can also affect the margins of the company.
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UBS Securtities has a target price of Rs 2,750
Last month, UBS Securtities India started coverage of Nykaa and has set a target price of Rs 2,750 for a year. This is 40 percent more than its current level. Nykaa is one of the few new platforms with an EBITDA margin of 6.6 per cent. According to UBS Securtities, by the financial year 2026. can increase to 15.9%. Because the growth of private labels is very high. With the expansion of the fashion segment, business growth driven by influencers and operating leverage, the stock looks promising.
(Article: Surabi Jain)
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