Nykaa Share Price Target: HDFC Securities is bearish on FSN E-Commerce Ventures, which owns the Nykaa platform. The brokerage has maintained SELL on Nykaa for a target price of Rs 205.
The target price implies a downside of 15 per cent from the Wednesday's (March 17) closing of Rs 238.15.
HDFC Securities said that Nykaa’s FY26 customer acquisition drive, especially in BPC (priced-in), is certainly encouraging. However, it suspects that in the medium term, the ask from BPC growth remains high.
In 9MFY26, as per its estimates, if one strips out own brands’ sales and eB2B, core BPC is estimated to have grown at sub-20 per cent.
One may argue why strip out own brand sales? The reasons are two-fold: Only one private label is estimated to account for more than 60 per cent of private labels’ GMV, and reliance on other channel sales is on the rise for its own brands (BPC), which is not exactly a confidence booster for own platform health.
The brokerage said that while own brands (BPC) grew 69 per cent YoY in 9MFY26; channel sales grew 47 per cent.
On BPC margins, we suspect a lion’s share of the 80bps BPC margin is courtesy (1) higher own brands salience and (2) improving eB2B margins (~500bps in 9MFY26). We suspect core BPC platform margins do not offer leverage benefits, given the imperative to invest more in rapid fulfillment options.
Fashion losses continue to ebb; however, from here on, most of the heavy-lifting would have to be done by cutting the customer acquisition purse; which may in turn have growth implications.
