Anand Rathi initiates India's Nykaa with 'buy' on improving profitability
BUZZ-Anand Rathi initiates India's Nykaa with 'buy' on improving profitability ** Anand Rathi initiates coverage on Indian beauty and fashion retailer Nykaa FSNE.NS with "buy" rating and TP of 400 rupees, implying about 16% upside from brokerage's reference price of 344 rupees
** Brokerage expects co's earnings growth to accelerate, supported by premiumisation in its core beauty and personal care business and improving profitability at its fashion arm
** Forecasts revenue and EBITDA to grow at compound annual rates of about 26% and 45%, respectively, over FY26-FY29, with EBITDA margin expanding to 11.4% from 7.5%
** Expects co's beauty brands, including Dot & Key and Kay Beauty, to support margin growth, while expanding physical stores and online adoption provide further growth opportunities
** Flags slowing discretionary demand, higher customer acquisition costs and intense competition as key risks
** YTD stock up 28.17%
(Reporting by Surbhi Misra in Bengaluru)
((Surbhi.Misra@thomsonreuters.com | X: https://twitter.com/SurbhiMisra_ |;))
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