Nykaa (FSN Ecom) shares will be in focus after HSBC, Citi, and Nomura released mixed views on the stock following the company’s Q4FY25 results.
HSBC downgraded its rating on Nykaa to Hold, cutting the target price to ₹200 per share. The brokerage highlighted that beauty segment (BPC) continued to show strong growth trends, with +31% YoY GMV growth in Q4FY25. Meanwhile, fashion GMV growth improved to +18% YoY, up from 8% in Q3. However, HSBC flagged limited clarity on the company’s earlier commitment to achieve break-even in the fashion business EBITDA margin by FY26.
Citi maintained a Sell call on Nykaa with a target of ₹160 per share. The brokerage noted that Q4 was in-line overall. BPC continued to deliver broad-based growth. However, fashion remains weak, with revenue growth at just 11% YoY, despite an escalation in advertising & promotion (A&P) spending. Citi said EBITDA losses in fashion remain high, at -10% of NSV, though this improved by 140 bps YoY, but still missed estimates.
Nomura is Neutral on Nykaa, with a target of ₹216 per share. The brokerage noted that Q4 EBITDA was slightly ahead of estimates, with BPC growth on track and management maintaining focus on driving profitable growth in fashion. Nomura said that the stock trades at 5x FY26E EV/sales, which it views as a fair value zone. However, it flagged that margin improvement in the business has been slow and would need to pick up for the brokerage to turn more constructive on the stock.
Overall, while BPC growth remains solid, brokerages flagged fashion segment profitability and margin progression as key areas to watch for Nykaa in the coming quarters.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
