Nykaa Stock: Motilal Oswal Flags Limited Upside After Strong Rally, Sets Neutral Rating

Motilal Oswal Financial Services (MOFSL) has initiated coverage on FSN E-Commerce Ventures, the parent company of Nykaa, noting its strong position as a leading specialty platform in India’s beauty and personal care (BPC) segment. Nykaa commands around 27% share of the online BPC market and differentiates itself through brand authenticity, trusted curation, content-driven discovery, and an omni-channel model, rather than aggressive discounting used by generalist e-commerce players.

MOFSL highlighted that India’s BPC market is at a structural inflection point, with online penetration expected to rise from about 22% in FY25 to 35% by FY30. Growth is being driven by premium beauty products, increasing adoption of digital channels, and the rise of direct-to-consumer brands. Nykaa is well positioned to benefit from these trends, with its focus on premium skincare, cosmetics, fragrances, and inventory-led operations helping it stand out in a market challenged by counterfeits.

The brokerage estimates Nykaa’s BPC GMV to grow at a 26% CAGR between FY25 and FY30, with EBITDA growth of 35% supported by operating leverage and higher contribution from owned brands. However, MOFSL believes much of this growth is already priced in, following a sharp rally in the stock. Valuing the company on a sum-of-the-parts basis, MOFSL has set a target price of Rs 280 and initiated coverage with a ‘Neutral’ rating, citing limited near-term upside.

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