Target: ₹250
CMP: ₹209.85
Nykaa’s Investor Day showcased the company’s aggressive growth aspirations across BPC and Fashion segments, with its eB2B business already witnessing strong growth momentum. The company also guided towards FY26 EBITDA breakeven for Fashion, earlier than our FY27 estimate.
While management refrained from providing BPC EBITDA margin guidance due to its continued focus on growth, we expect contribution margins to remain stable, with EBITDA margin expansion likely supported by operating leverage. Nykaa’s suggestion of mid-20s GMV growth in BPC and a 3-4x increase in Fashion NSV over the next five years reflects management’s strong confidence in scaling multiple growth levers, reinforcing its distinctive market positioning.
Moreover, the company’s ability to deliver robust growth in a tepid demand environment over the last year, along with margin enhancement, further underlines its differentiated offering. We maintain a ‘Buy’ rating with a Mar’26 TP of ₹250.
While current valuations may appear stretched on FY27 basis, we believe that one should adopt a longer-term perspective, as Nykaa’s high-growth trajectory and compounding remain intact over the medium to long term.