Nykaa shares down 25% from 52-week high; worth buying?

FSN E-Commerce Ventures Ltd (Nykaa) shares are in the fair value zone after a 25 per cent slide in it shares, said analysts, as the company reported low-thirties YoY growth in (beauty & personal care) BPC segment for the December quarter. Analysts noted the eB2B now accounts for 8 per cent of the BPC segment’s gross merchandise value (GMV).

JM Financial suggested a target of Rs 240 on the stock. Nomura India gave a price target of Rs 203 on Nykaa. For Morgan Stanley, the stock is worth Rs 200. On Tuesday, the scrip closed at Rs 172.20 on BSE. The targets suggest up to 39 per cent potential upside on Nykaa.

“Our triangulation for core BPC YoY growth suggests that it would roughly fall in 27-29 per cent range. Such feisty growth, despite the narrative of Quick Commerce (QC) likely hindering Nykaa, goes a long way in confirming that QC solves for a different use case and revalidates our thesis that BPC rise in QC is unlikely to come at the cost of Nykaa,” JM Financial said.

Nykaa Fashion continued to report muted growth with net sales value (NSV) rising in mid-teens. However, JM Financial said its channel checks suggest that the company would still have gained market share considering the sustained pressure in online fashion.

“In BPC, we factor in 29 per cent YoY growth in GMV and 28 per cent YoY growth in revenue in FY25F. For 3QFY25F, we expect 32 per cent YoY growth in GMV (30 per cent YoY in 9MFY25F) and 28 per cent YoY revenue growth (25 per cent YoY in 9MFY25), which largely seems to be on track.
In the case of Fashion, we expect GMV/revenue growth of 26 per cent/38 per cent YoY in FY25F,” it said.

Overall, Nomura India expects Q3 consolidated revenue growth of 27 per cent YoY and Ebitda margin at 5.9 per cent (up 40 basis points sequentially). This would still be lower than its FY25F expectation of 29 per cent YoY revenue growth and Ebitda margin of 7.5 per cent.

“While growth seems to be on track, especially in BPC, the subdued consumption trend has led to higher marketing costs, thus impacting the segment’s margin performance. Hence, there remains downside risks to our margin recovery estimate of 7.5 per cent/8.4 per cent in FY25/26F,” Nomura India said.

JM Financial has tweaked its forecasts to factor in significantly lower growth in Nykaa’s Fashion segment while also expecting the lower GMV-Revenue conversion in BPC to sustain at current levels for longer than earlier expected. It reiterated Nykaa as one of its top picks in Internet sector with a March 2026 target price of Rs 240.