Shares of Nykaa (listed as FSN E-Commerce Ventures Limited) climbed over 4 per cent today after the fashion retailer reported a 33.4 per cent rise in consolidated net profit in the June quarter. Nykaa shares gained 4.3 per cent intraday to Rs 1,473.75 on BSE. Earlier, the stock opened 3.07 per cent higher at Rs 1,473.35 against the previous close of Rs 1,412.60.
Nykaa stock is trading lower than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. The stock has slipped 34.12 per cent this year and fallen 18.21 per cent in a month.
It touched a 52-week high of Rs 2,574 on November 26, 2021 and hit a 52-week low of Rs 1208 on BSE.
Total 0.31 lakh shares of the firm changed hands amounting to a turnover of Rs 4.33 crore. Market cap of the firm rose to Rs 67,158 crore ON BSE.
Net profit in the June quarter rose to Rs 4.55 crore against a profit of Rs 3.41 crore in the year-ago period.
However, profit of the beauty e-commerce platform fell 47.6 per cent from Rs 8.56 crore in the March 2022 quarter (Q4FY22).
Revenue from operations rose 40.5 per cent to Rs 1,148.42 crore in the quarter under review as against Rs 816.991 crore in the same quarter last fiscal.
During the quarter, Nykaa's gross merchandise volume (GMV) grew 47 per cent YoY to Rs 2,155.8 crore.
Here's a look at what brokerages said about the outlook of the stock post Q1 earnings.
JM Financial is bullish on the stock.
"The omni-channel expansion continued with 112 stores in 52 cities along with 30 fulfilment centres in 14 cities as Superstore by Nykaa is an inventory and distribution led business. We are also appreciative of channel expansion being pursued by Nykaa Fashion with online presence across Nykaa, D2C and 3P platforms supplemented by multi-brand outlets and GT across offline trade. We retain 'BUY' rating with a June 23 target price of Rs 1,750 (24% upside) as we accommodate faster than expected revenue growth, albeit at relatively lower margins, " said the brokerage.
ICICI Securities has assigned a hold call on the stock after Q1 earnings were announced.
"The competition will likely intensify from both vertical and horizontal peers. While we expect BPC revenues to grow, we believe Nykaa's journey could be different -it will have to go more mainstream to drive this growth (tougher decisions about brand stretch along the way). Maintain HOLD with a target price of Rs 1,400," said ICICI Securities.
International brokerage Jefferies is bullish on the stock.
It has given a buy call with a target price of Rs 1,650. "The firm reported strong GMV growth across BPC & Fashion, which was well above estimates. Costs were higher led by staff expenses which resulted in an earning miss. Management sounded confident on 'profitable' growth even for initiatives beyond BPC," the brokerage said.
Tirthankar Das, Technical & Derivative Analyst, Retail, Ashika Stock Broking
"The stock is seen consolidating amidst the narrow range of Rs 1,350-Rs 1,545 for the past two months. Prices are on a base building mode around the major support area of Rs 1,350- Rs 1,390 and is now at the cusp of breaking out above the last two-months range, signaling resumption of up move and thus offers fresh entry opportunity. Price consolidation is accompanied by strong volumes highlighting larger participation. Among the oscillators the daily MACD is in rising trajectory above its 9-period average and the zero level line thus validates positive bias. However, amidst all the optimism, a trader can buy on strength i.e. once the stock has logged a breakout above the consolidation range of 1550 to ride the next leg of up move initially towards Rs 1,750 followed by Rs 1,850 in the near term."
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