@jamit05 I agree with you on this. Nykaa is a growth company and it is using its profitability to fuel its growth. A 40-50% growth on topline and a similar margin will justify the stock price as long as this is met.
Once the top line reaches a higher level, operating leverage will kick in and margins should expand. This (winning market share) is the only way Nykaa can survive. Once the company reaches a significant market share, it’s a no-brainer that it will reduce its spending.
Just to give you content Zscaler (NSE: ZS) a company in the cyber security domain works in a similar way. The company is a leader in cloud security but uses the excess cash to capture the market share.
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