Add FSN E-Commerce Ventures, target price Rs 180: HDFC Securities

HDFC Securities has an Add call on FSN E-Commerce Ventures or Nykaa with a target price of Rs 180. The current market price of Nykaa is Rs 180. FSN E-Commerce Ventures., incorporated in 2012, is a Small Cap company with a market cap of Rs 51496.38 crore, operating in the services sector.

FSN E-Commerce Ventures' key products/revenue segments include E-Commerce for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 2272.74 crore, up 20.88% from last quarter Total Income of Rs 1880.19 crore and up 26.52% from last year same quarter Total Income of Rs 1796.38 crore. The company has reported net profit after tax of Rs 26.97 crore in the latest quarter.

The company's top management includes Mrs.Falguni Nayar, Mr.Milan Khakhar, Mr.Sanjay Nayar, Mr.Milind Sarwate, Mr.Seshashayee Sridhara, Mr.Pradeep Parameswaran, Ms.Santosh Desai, Mr.Anchit Nayar, Ms.Adwaita Nayar, Ms.Anita Ramachandran, Mrs.Falguni Nayar, Mr.Milan Khakhar, Mr.Sanjay Nayar, Mr.Milind Sarwate, Mr.Seshashayee Sridhara, Mr.Pradeep Parameswaran, Ms.Santosh Desai, Mr.Anchit Nayar, Ms.Adwaita Nayar, Mrs.Falguni Nayar, Ms.Anita Ramachandran, Mr.Milan Khakhar, Mr.Sanjay Nayar, Mr.Milind Sarwate, Mr.Seshashayee Sridhara, Mr.Pradeep Parameswaran, Ms.Santosh Desai, Mr.Anchit Nayar, Ms.Adwaita Nayar, Ms.Anita Ramachandran, Mrs.Falguni Nayar, Mr.Milan Khakhar, Mr.Sanjay Nayar, Mr.Milind Sarwate, Mr.Seshashayee Sridhara, Mr.Pradeep Parameswaran, Ms.Santosh Desai, Mr.Anchit Nayar, Ms.Adwaita Nayar, Ms.Anita Ramachandran. Company has S R Batliboi & Asscoiates LLP as its auditors. As on 31-12-2024, the company has a total of 286 crore shares outstanding.

Investment Rationale
Nykaa remains an efficient online business, especially for BPC. Fashion remains a WIP. Post a two-year time correction, valuations now seem palatable. If one were to value the core BPC at 39x FY27 EV/EBITDA, then HDFC Securities is effectively paying only for the core online BPC business, while fashion and eB2B business remain optional values. The brokerage reiterates an ADD rating with a DCF-based target price of 180/share (implying 47x EV/EBITDA) on a consolidated basis.

Promoter/FII Holdings
Promoters held 52.16 per cent stake in the company as of 31-Dec-2024, while FIIs owned 9.05 per cent, DIIs 23.56 per cent.