NYKAA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.6
| Stock Code | NYKAA | Market Cap | 75,811 Cr. | Current Price | 265 ₹ | High / Low | 286 ₹ |
| Stock P/E | 1,202 | Book Value | 5.98 ₹ | Dividend Yield | 0.00 % | ROCE | 6.25 % |
| ROE | 6.10 % | Face Value | 1.00 ₹ | DMA 50 | 257 ₹ | DMA 200 | 243 ₹ |
| Chg in FII Hold | 0.25 % | Chg in DII Hold | -0.01 % | PAT Qtr | 23.3 Cr. | PAT Prev Qtr | 12.2 Cr. |
| RSI | 56.2 | MACD | 4.45 | Volume | 22,06,137 | Avg Vol 1Wk | 33,81,967 |
| Low price | 188 ₹ | High price | 286 ₹ | PEG Ratio | -595 | Debt to equity | 0.08 |
| 52w Index | 78.5 % | Qtr Profit Var | -4.91 % | EPS | 0.21 ₹ | Industry PE | 38.0 |
Financials & Valuation:
NYKAA shows weak fundamentals. ROCE (6.25%) and ROE (6.10%) reflect poor capital efficiency. EPS of 0.21 ₹ is extremely low relative to market cap, and quarterly PAT (23.3 Cr. vs 12.2 Cr.) shows growth but remains modest. Debt-to-equity at 0.08 is low, ensuring balance sheet stability.
Valuation Indicators:
P/E ratio of 1,202 is drastically higher than the industry average (38.0), indicating severe overvaluation. Book Value of 5.98 ₹ compared to current price of 265 ₹ shows extreme premium pricing. PEG ratio of -595 highlights unsustainable valuation relative to growth. Dividend yield is 0%, offering no income support.
Business Model & Health:
NYKAA, a leading e-commerce beauty and lifestyle retailer, benefits from strong brand presence and digital reach. However, profitability metrics remain weak, and valuations are disconnected from fundamentals. FII holdings increased slightly (+0.25%), while DII holdings declined (-0.01%), showing mixed sentiment.
Entry Zone & Holding Guidance:
Technically, support lies around 255–265 ₹, with resistance near 280–285 ₹. Entry should only be considered for speculative trades near support levels. Long-term holding is not advisable until profitability improves and valuations normalize.
Positive
- Strong brand presence in beauty and lifestyle e-commerce.
- Low debt-to-equity (0.08).
- FII holdings increased (+0.25%).
- PAT growth from 12.2 Cr. to 23.3 Cr.
Limitation
- Extremely high P/E (1,202) vs industry average (38.0).
- Very low EPS (0.21 ₹).
- Weak ROCE (6.25%) and ROE (6.10%).
- No dividend yield.
- PEG ratio (-595) reflects unsustainable valuation.
Company Negative News
- Decline in DII holdings (-0.01%).
- Weak profitability metrics despite revenue growth.
- Severe overvaluation compared to peers.
Company Positive News
- Quarterly PAT improved to 23.3 Cr. from 12.2 Cr.
- FII holdings increased, showing foreign investor confidence.
- Strong digital presence and brand recognition.
Industry
- E-commerce and beauty retail sector benefits from rising consumer demand.
- Industry PE (38.0) is far lower than NYKAA’s, highlighting overvaluation.
- Long-term growth supported by digital adoption, but profitability remains a challenge.
Conclusion
NYKAA is fundamentally weak with poor profitability and extreme overvaluation. Entry near 255–265 ₹ may be considered only for speculative trades. Long-term investors should avoid until earnings improve and valuations align with industry benchmarks.
Would you like me to extend this into a valuation overlay comparing NYKAA against peers like Purplle, Myntra (Flipkart), and international players such as Sephora, to highlight relative positioning in profitability and efficiency?