Morgan Stanley has reiterated its overweight rating on FSN E-Commerce Ventures (Nykaa) with a target price of ₹225, citing strong growth in both its beauty and fashion segments and improving profitability trends. In the first quarter, the beauty segment recorded 26% growth in gross merchandise value (GMV) and maintained an EBITDA margin of 9%. The fashion segment also saw a sharp improvement, with GMV growth accelerating to 25% and EBITDA margin improving to -6.2%.
The company reiterated its focus on driving penetration and premiumisation across categories, while also targeting EBITDA break-even in the fashion segment by FY26. Management noted that urban markets remain under some stress, but expects Nykaa to continue growing faster than the overall market, supported by expanding brand partnerships, customer acquisition, and category diversification. Morgan Stanley said the combination of strong growth, improving margins, and a clear roadmap for profitability in the fashion segment underpins its positive stance on the stock.
Disclaimer: The views and recommendations made in this article are those of Morgan Stanley. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
