Equity Research Report - FSN E-Commerce Ventures Limited

Summary

The Nykaa Story - India’s largest Omni channel beauty destination

Company Profile:

FSN E-Commerce Ventures Limited, through its subsidiaries, provides various personal care, beauty and fashion products in India. The organization manufactures, distributes, and sells beauty, wellbeing, fitness, personal care, health care, skin care, hair care products, fashion garments, style add-ons, and equipment. It additionally offers western wear, which includes clothes, jumpsuits, tops, pants skirts, as well as shoes, luggage, and accessories; underwear, including bras, panties, sleepwear, shapewear, and athleisure; and aesthetic jewellery comprising rings, necklaces, bracelets, rings, and hair accessories. The agency gives its very own merchandise beneath the Nykaa Cosmetics, Nykaa Naturals, Kay Beauty, Twenty Dresses, Nykd by using Nykaa, and Pipa Bella manufacturers. It retails its products thru e-trade, m-trade, Internet, and Intranet, in addition through physical shops, stalls, general trade, modern trade, etc. As of March 31, 2021, it operated 73 physical shops underneath the Nykaa Luxe, Nykaa On Trend and Nykaa Kiosks codecs. The organisation was founded in 2012 and is based totally in Mumbai, India.

Key Statistics:

Market Cap   ₹ 66371 Cr.

Current Price  ₹ 1399.3

52W High   ₹ 2573.7

Stock P/E   1568.7

Book Value   ₹ 28

Dividend Yield   0%

P/B   49.9

Face Value   1

52W Low   ₹ 1207.5

Source: www.sharescart.com

Shareholding Pattern (%):

Source: www.sharescart.com

Peer Comparison:

Source: www.sharescart.com

Key Growth Strategies and Drivers :

1. Driving customer acquisition and retention across the funnel journey.

2. Deep relationships with a diverse set of domestic & international brands.

3. Penetrating across the value chain and channels to address the larger TAM.

4. Creating, acquiring, and scaling a portfolio of independent and new age consumer-first brands.

5. Developing new ways of selling and a holistic consumer connect.

6. Expanding Physical Stores network

7. Continue to expand fulfilment centers for better consumer experience.

8. Superstores: Nykaa’s eB2B distribution platform, launched in Q2 FY2022.

9. BPC: Creating, acquiring, and scaling a portfolio of independent and new age consumer-first brands.

10. Developing new ways of selling and a holistic consumer connect.

11. Integration of L’Oreal’s Virtual Tool the Virtual try on feature is available for Maybelline New York, L'Oreal Paris, NYX Professional Makeup on Nykaa app.

Source: Company's Latest Quarterly Presentation.

Financial Snapshot:

Balance Sheet (Rs. in Crores):

Profit and loss Account (Rs. in Crores):

Cash Flow Statement (Rs. in Crores):

Source: www.sharescart.com

Conclusion:

n the basis of the discount cash flow valuation method we are recommending 'Buy' for the stock. Since the stock  offers good opportunity, we initiate a 'Buy' signal on the stock with 12 month price target of Rs. 1702/- share an upside of 21.66% from current levels.