Nykaa Share Price: How much and why will you get profit on buying shares? Analyst answered every question

News Topical, Digital Desk : Nykaa's parent company, FSN E-Commerce Venutre Limited's stock is seeing a decline of about half a percent during early trading today. But, analysts believe that this stock will see a rise of about 13% in the coming 12 months. Hong Kong brokerage firm CLSA has included FSN E-Commerce in its coverage list and predicted a rise in the stock. During the last two sessions, this stock has shown a rise of 6%.

Global brokerage firm CLSA has set a target price of Rs 229 per share while setting an Outperform rating on this stock in its note. This stock is up by about 13% as compared to Monday's close.

What is the logic of the rise in Nykaa stock?
CLSA said in its report that Nykaa is the leading company in online and offline beauty retail in India. It is also an emerging name in online fashion retail. India's beauty market is growing rapidly. People's desire and income are increasing. CLSA believes that Nykaa is in a strong position to take advantage of this change.
However, despite Nykaa's growth in fashion retail, this segment is very competitive and it is a discount best segment.

According to CLSA, Nykaa is the clear market leader in Beauty Retail based on GMV (Gross Merchandise Value). This is a $16.5 billion market, which is expected to grow rapidly in the next five years. Despite existing players like Myntra, ShopperStop and D-Mart and new competition like Tira, CLSA believes that Nykaa maintains a strong connection with customers through its app and stores. These stores are also a means of education for those using beauty products for the first time. 

Will there be a booster dose of growth in profits? However, Nykaa's stock seems expensive in terms of valuation. But CLSA says that the weak performance after listing is now about to end. This can be said especially considering the strong brand value of the company. CLSA also said that the company's profit growth potential can increase investor confidence. The brokerage estimated that Nykaa's EBITDA margin will increase by 310 basis points between FY25 and FY28.

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