Nomura has maintained a ‘Neutral’ rating on FSN E-Commerce Ventures Ltd (Nykaa), setting a target price of ₹190 per share, citing potential downside risks to Q4FY25 earnings. The brokerage expects gross merchandise value (GMV) growth in the Beauty & Personal Care (BPC) segment to remain strong in the low-thirties, with its estimate at 32% YoY for Q4FY25. However, net revenue growth is projected to be in the mid-twenties, with Nomura forecasting 25.3% YoY for the March quarter.
Growth in the fashion category is expected to be more moderate. Management guided for high-teens GMV growth, but Nomura remains conservative, estimating 10.5% YoY GMV expansion for Q4FY25. The brokerage notes sequential improvement in Nykaa’s core fashion platform business.
Overall, Nomura forecasts consolidated revenue growth of around 26% YoY for the quarter, but warns of downside risks due to heightened competition and slower pick-up in discretionary demand.
Nykaa continues to benefit from its brand visibility and loyal customer base, but the valuation remains rich relative to near-term earnings visibility, according to Nomura.
Disclaimer: The above views are of the broker’s and not the author or the publication’s. Please make any and every investment decision after consulting your financial advisor.
