Credit Suisse said the stock is trading at nine times EV (enterprise value) to FY24 estimated sales, giving no headroom for likely challenges in fashion.
“Nykaa lacks sufficient differentiation in Fashion (50% share) and expanding presence of Ajio and Tata.”
Fashion is the second biggest segment in e-commerce after electronics with an FY22 market size of $11 billion, it said. The industry is expected to rise to $24 billion by FY27, a compounded growth rate estimate of 17%.
“Nykaa is a recent entrant in the space and is sub-scale with NSV (Net Sales Value) of $80 million in FY22 or