Given the recent volatility in the stock, we again bake in a higher cost of capital assumption, which yields a target price of Rs 195 (Rs 251 earlier); maintain ‘BUY’. At CMP, Nykaa is trading at FY25E EV/sales of 5x. The confluence of both growth and profitability would be critical for valuations to improve. Besides, the gross margin miss, an aberration as per management, must reverse else as any structural impact could negate benefits in marketing and fulfilment.
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