I find the management reliable, business disruptive, leadership position and addressable market size to be large enough for a decade of growth at 20% run rate.
Regarding a correct entry price, I am groping in the dark. I assumed 15% as net margins, after I learned from local distributors that they have 3% net margins for beauty products, around 8% gross. Nykaa handling the entire supply chain, super distribution, distribution, retailing etc 15% seemed reasonable. Nykaa has 97 days of cash conversion cycle.
Since, I don’t have a good number, I am going to buy this stock at corrections. And after 50% correction and a visually discerning consolidation, unquestionable, I feel 1300 to 1400 is a good time to invest.
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