Buy Nykaa, target price Rs 1,859: Edelweiss Securities
The recent stock correction is a reflection of the risk-off on consumertech and a miss on customer addition last quarter, which the brokerage believes isa one-off and will reverse as management focus on growth remainsclear.
By ETMarkets.com | Updated:
ETtech
Edelweiss Securities has initiated a buy call on FSN E-Commerce Ventures with a target price of Rs 1,859.
The recent stock correction is a reflection of the risk-off on consumer tech and a miss on customer addition last quarter, which the brokerage believes is a one-off and will reverse as management focus on growth remainsclear.
FSN E-Commerce Ventures Ltd., incorporated in the year 2012, is a Small Cap company (having a market cap of Rs 71707.59 Crore) operating in Services sector.
Investment Rationale
The BPC industry is at present a Rs 1.1 trillion market with the e-commerce share at 8% (Nykaa market share: 37%), one of the lowest among major retail categories. Even adjusting for segments relevant for Nykaa, Edelweiss believes the market opportunity remains significant at Rs 250 billion in CY25 (FY26), a 2.7x potential.
Nykaa is unique in terms of its profitable unit economics and remains one of the few profitable new-age companies. Nykaa’s focus via an exclusive platform (vertical) along with its current scale, has created a virtuous cycle to help sustain its market share in the category, the brokerage said.
The brokerage also build-in a market share of 5% by FY26 (FY21: 1.5%), with the segment breaking even by FY28.
Financials
For the quarter ended 31-12-2021, the company has reported a Consolidated Total Income of Rs 1104.27 crore, up 24.01% from last quarter total income of Rs 890.46 crore. The company reported net profit after tax of Rs 29.02 crore in latest quarter.
As on 31-12-2021, the company has a total of 47 Crore shares outstanding.
Promoter/FII Holdings
Promoters held 52.56 per cent stake in the company as of 31-Dec-2021, while FIIs owned 5.73 per cent, DIIs 3.42 per cent.
The recent stock correction is a reflection of the risk-off on consumer tech and a miss on customer addition last quarter, which the brokerage believes is a one-off and will reverse as management focus on growth remainsclear.
FSN E-Commerce Ventures Ltd., incorporated in the year 2012, is a Small Cap company (having a market cap of Rs 71707.59 Crore) operating in Services sector.
Investment Rationale
The BPC industry is at present a Rs 1.1 trillion market with the e-commerce share at 8% (Nykaa market share: 37%), one of the lowest among major retail categories. Even adjusting for segments relevant for Nykaa, Edelweiss believes the market opportunity remains significant at Rs 250 billion in CY25 (FY26), a 2.7x potential.
Nykaa is unique in terms of its profitable unit economics and remains one of the few profitable new-age companies. Nykaa’s focus via an exclusive platform (vertical) along with its current scale, has created a virtuous cycle to help sustain its market share in the category, the brokerage said.
The brokerage also build-in a market share of 5% by FY26 (FY21: 1.5%), with the segment breaking even by FY28.
ADVERTISEMENT
Financials
For the quarter ended 31-12-2021, the company has reported a Consolidated Total Income of Rs 1104.27 crore, up 24.01% from last quarter total income of Rs 890.46 crore. The company reported net profit after tax of Rs 29.02 crore in latest quarter.
As on 31-12-2021, the company has a total of 47 Crore shares outstanding.
Promoter/FII Holdings
Promoters held 52.56 per cent stake in the company as of 31-Dec-2021, while FIIs owned 5.73 per cent, DIIs 3.42 per cent.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
Related Articles
Nykaa share price is up from IPO price even now: Falguni NayarADVERTISEMENT
