NYKAA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 2.9

🧠 How I’m Thinking About This

You're asking for a full-spectrum analysis of Nykaa (FSN E-Commerce Ventures Ltd), and the numbers tell a story of a high-growth consumer-tech brand with a valuation that’s still riding its IPO halo. Let’s unpack the fundamentals and see where it stands.

📊 Core Financials Overview

Profitability

ROCE: 6.25% | ROE: 6.10% — modest returns, not ideal for a ₹70,000 Cr market cap

EPS: ₹0.24 — extremely low, which makes the P/E ratio of 1,032 unsustainable

PAT Qtr: ₹12.9 Cr vs ₹14.6 Cr — declining profits, with a steep 69.4% drop in quarterly variance

Balance Sheet & Cash Flow

Debt-to-Equity: 0.05 — very low debt, which is a strength

Book Value: ₹5.80 — P/B ~42.4, extremely high

Dividend Yield: 0.00% — no income for long-term holders

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 1,032 Astronomical — not justified by earnings

PEG Ratio -511 Negative PEG suggests unreliable growth estimates

Intrinsic Value ~₹180–₹200 CMP is significantly above fair value

Valuation is highly inflated. The fundamentals don’t support the current price, especially with declining profitability.

🛍️ Business Model & Competitive Edge

Sector: E-commerce — beauty, fashion, lifestyle

Strengths

Strong brand recall and influencer-led marketing

Omnichannel presence with 160+ physical stores

High-margin private labels like Kay Beauty and Dot & Key

Expanding into Tier-2/3 cities with regional content and logistics

Challenges

Weak return ratios despite scale

No dividend policy

EPS and profit margins under pressure

DII holding down 1.56% — cautious domestic sentiment

📉 Technicals & Entry Zone

Current Price: ₹246

DMA 50: ₹225 | DMA 200: ₹200 — bullish trend

RSI: 67.7 — nearing overbought zone

MACD: Positive — momentum intact

📌 Suggested Entry Zone: ₹190–₹210

A pullback near the 200 DMA would offer better risk-reward, especially if earnings stabilize.

🧭 Long-Term Holding Guidance

Hold with caution: If already invested, monitor profitability and margin trends closely.

Avoid fresh entry at CMP: Wait for valuation to cool or earnings to justify the premium.

You can explore Nykaa’s financials and chart on TradingView or check its stock overview on StockAnalysis for deeper insights

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. Let me know if you'd like a peer comparison with Mamaearth or a forecast model based on fashion segment growth.

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in.tradingview.com

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stockanalysis.com

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