Nykaa shares upside capped after strong rally, Motilal Oswal says

Shares of FSN E-Commerce Ventures Ltd., the parent of beauty and fashion retailer Nykaa, gained as much as 2% on Tuesday, December 23, after brokerage firm Motilal Oswal initiated coverage on the stock.

The brokerage began coverage with a 'Neutral' rating and a target price of ₹280 per share, implying an upside of about 11% from current levels.

Motilal Oswal said that after the stock's strong performance over the past year, the risk reward now appears balanced, limiting near-term upside.

The brokerage described Nykaa as a leading specialty platform in beauty and personal care products, bringing brands, consumers and product discovery together within a focused ecosystem.

With a 27% share of India's online beauty and personal care market, Nykaa operates as a category specialist in a segment where product authenticity, brand trust and guided discovery influence purchase decisions more than aggressive discounting or sheer assortment.

Motilal Oswal added that while generalist e-commerce platforms compete largely on logistics and discounts, Nykaa's platform is driven by content, influence and brand trust. Its inventory-led model for beauty products, direct brand relationships and omni-channel presence continue to differentiate it in a market affected by counterfeits and commoditisation.

For the beauty and personal care business, the brokerage assigned a 50 times EV EBITDA multiple, reflecting category leadership, higher margins compared to horizontal platforms and better earnings visibility from owned brands.

This implies a per-share value of ₹255. For the fashion business, Motilal Oswal assigned a per-share value of ₹31.

Nykaa is currently tracked by 25 analysts, of whom 12 have a 'Buy' rating, four recommend 'Hold' and nine have a 'Sell' call.

Shares of FSN E-Commerce Ventures settled 1.32% higher at ₹256.95 on Tuesday. The stock has gained 56% so far in 2025, although it is down 5% over the past month.