CLSA has maintained its Outperform rating on Nykaa with a target price of ₹229, implying a potential upside of 15.4% from the current market price of ₹198.40. The brokerage noted that while geopolitical tensions affected the company’s beauty segment during its flagship sales event, both beauty and fashion divisions continue to show resilient underlying growth.
In its Q1 update, Nykaa indicated that consolidated gross merchandise value (GMV) grew in the higher end of the mid-twenties range, broadly in line with expectations. However, CLSA anticipates that revenue will be slightly lower due to softer performance in the beauty business during the quarter.
Despite that, GMV for the beauty category is still expected to clock mid-twenties growth, supported by strong demand fundamentals. The fashion business showed a sharper rebound, with GMV growth accelerating to the mid-twenties—up from 18.4% in Q4FY25—and fashion revenue growth in the mid-teens, significantly ahead of CLSA’s forecast of 10.7%.
The brokerage sees Nykaa’s improving traction in fashion and continued scale in beauty as positive signs for its multi-category strategy, and believes the long-term investment case remains intact.
Disclaimer: The views expressed above are those of CLSA and do not constitute investment advice. This article is for informational purposes only.
