Morgan Stanley has reiterated an ‘Overweight’ rating on Nykaa, with a target price of ₹200 per share, following a strong quarterly performance. The company delivered a beat on both revenue growth and EBITDA margins, despite challenging market conditions in the retail sector.
Nykaa has demonstrated consistent topline growth in its beauty segment, which has remained resilient even amid a broader slowdown in discretionary spending. The brokerage views Nykaa as a consumer business with a strong technology edge, which gives it a competitive advantage over traditional retailers.
Morgan Stanley projects a 29% topline CAGR over FY24-27, with the beauty business expected to drive most of the growth. The brokerage is particularly bullish on Nykaa’s ability to scale its operations efficiently, leveraging its digital-first approach and robust supply chain network.
While short-term headwinds persist, MS believes that Nykaa’s long-term growth potential remains intact, making it a compelling investment in the e-commerce and retail space.
