The share price of Nykaa (FSN E-Commerce Ventures) dropped over 3% on Monday, trading around Rs 196.33 at the time of writing. The stock slipped after brokerages gave mixed reactions to the company’s latest quarterly results.
While some brokerages maintained a bullish stance citing strong growth in its core beauty business, others raised concerns over its fashion segment and slow margin expansion.
Let’s take a look at how key brokerages are assessing the share performance going forward-
Citi on Nykaa: Bearish with ‘Sell’ rating
Citi is the most bearish among the brokerages, assigning a ‘Sell’ rating with a target of Rs 160.
According to the firm, while BPC continues to grow steadily, the fashion business is still underperforming, with only 11% revenue growth despite increased advertising.
Citi noted that “EBITDA losses at -10% of NSV declined 140bps YoY & missed estimates” and raised concerns about sustained margin pressure in a highly competitive market.
HSBC on Nykaa: Downgrades to ‘Hold’
HSBC has taken a more cautious view and has downgraded the stock to Hold, cutting the target price to Rs 200. The firm appreciated the strong GMV growth in both beauty (up 31% YoY) and fashion (up 18% YoY) but pointed out the lack of visibility in terms of profit recovery in the fashion business.
According to HSBC, “Limited clarity on earlier commitment of break-even in fashion business EBITDA margin by FY26” remains a key concern.
Nomura on Nykaa: Neutral view, fair value zone
Nomura, on the other hand, remains cautious and has maintained a Neutral rating with a target price of Rs 216. The brokerage in its report highlighted the Nykaa’s strong EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin of 6.5% in Q4, which beat estimates, and stated that the “BPC growth is on track.” However, the fashion segment continues to be a sore spot.
“Nykaa’s focus on onboarding new global brands, expanding stores, and product curation should continue to drive strong revenue growth in BPC. But margin improvement thus far has been slow and needs to pick up for us to turn more constructive,” Nomura said.
The firm also rolled forward its valuation base to June 2026 and pointed out that Nykaa currently trades at around 5x FY26 EV/sales, which it believes is in the “fair value zone.”
Nuvama on Nykaa: Raising target, retaining ‘Buy’
According to Nuvama Institutional Equities, Nykaa’s core beauty and personal care (BPC) segment continues to shine with “strong double-digit growth along with improving profitability.”
The brokerage sees potential in the company’s medium-term outlook and has increased its target price from Rs 205 to Rs 235.
“We value Nykaa using DCF, yielding a TP of Rs 235 as we are increasing medium-term growth and profitability; retain ‘BUY’,” said Nuvama.
The firm did, however, trim its FY26/27 earnings estimates by around 6% each, even as it remains confident that the fashion business will recover as headwinds fade.
JM Financial on Nykaa: Confident in long-term story
JM Financial remains upbeat about the company’s prospects and has given a Buy rating with a target price of Rs 250. As per the brokerage, Nykaa’s beauty segment is showing consistent strength with 31% year-on-year GMV growth and 25% revenue growth. It also noted an 80 basis point improvement in the segment’s EBITDA margin.
While fashion margins disappointed due to higher marketing spends, JMFL believes that the core beauty business will drive future profitability. “Nykaa’s ability to deliver robust growth in a tepid demand environment along with margin enhancement demonstrates its differentiated market positioning,” the firm said.
The brokerage expects breakeven in the fashion segment to be pushed to FY27, but remains optimistic about the company’s overall growth trajectory.