Nykaa: 4Q: Good quarter with healthy growth & margin improvement

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Nykaa: 4Q: Good quarter with healthy growth & margin improvement

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Nykaa

4Q: Good quarter with healthy growth &

margin improvement

Reiterate Rating: NEUTRAL | PO: 295.00 INR | Price: 274.50 INR

In-line EBITDA; Fashion segment achieves break-even 21 May 2026

4Q revenues grew 28% YoY, in-line with est while gross profit came in-line with BofAe/ Equity

Street expectations. EBITDA came ahead of consensus but in-line with our estimates.

Overall margins +40bps QoQ at 8.4% (vs Street est at 7.9%). Fashion segment turned

Key ChangesEBITDA break-even during 4Q and mgmt in con call sounded confident about the fashion

margin trajectory continuing to be positive ahead. (Rs) Previous Current

Price Obj. 270.00 295.00

Offline store expansion remains on track and mgmt sees getting to 170-180 stores over 2027E EPS 1.58 1.51

next 2-3 years to reach the 500-store mark. The footprint is already covering top 99 2028E EPS 2.91 2.96

cities and focus ahead would be to increase density of store network in Tier 2/3 cities. 2029E EPS 4.99 4.80

Post 4Q, we tweak FY27/28E EPS and raise our FY28E target EV/EBITDA multiple for

BPC to 45X (vs 40X earlier), given robust execution. At 91X P/E & 50X EV/EBITDA on Sachin Salgaonkar >>

FY28E, we see balanced risk-reward & reiterate Neutral rating. Research Analyst

BofAS India

Con-call: Beauty unlikely to see inflationary headwinds +91sachin.salgaonkar@bofa.com22 6632 8667

1) Inflation & procurement costs are a risk and there is some pressure on brands to take Pankaj Mehendiratta >>

price increase – but it has not happened yet. While brands are trying not to pass on the ResearchBofAS IndiaAnalyst

costs to the customer, Beauty is a small luxury & ticket sizes are not large as part of +91 22 6632 8684

pankaj.mehendiratta@bofa.com