Nykaa shares: Elara Capital hikes target price; sees 43% upside potential

Elara Capital has retained its 'Buy' rating on FSN E-Commerce Ventures, the parent company of Nykaa, while raising its target price to Rs 475 from Rs 400, suggesting an upside potential of 43.07 per cent from Tuesday's closing price of Rs 332.

The domestic brokerage said its investment case is supported by premium user penetration and premiumisation, which it expects to drive sustained growth in the beauty and personal care (BPC) segment.

Elara expects BPC gross merchandise value (GMV) to grow at a CAGR of around 25 per cent through FY30. It also expects the online BPC market share to increase to around 32 per cent by FY30 from 27 per cent in FY26.

The brokerage said Nykaa's curated product offering and higher average order values (AOVs) provide insulation from disruption caused by quick-commerce platforms.

It added that Nykaa has also served as a launchpad for premium brands, while its higher AOVs provide greater margin insulation against rising costs associated with quick fulfilment.

Elara now values the BPC business at 75 times price-to-earnings (P/E), compared with 80 times earlier, while retaining its 4 times price-to-sales (P/S) multiple for the fashion business.

From a technical perspective, AR Ramachandran, Sebi-registered research analyst at Tips2trades, said Nykaa's stock is sideways to bullish on daily charts, with strong support at Rs 325.

"A daily close above the resistance of Rs 336 could lead to an upside target of Rs 348 in the near term," Ramachandran added.