Nykaa shares zoom 19% to hit one-year high; is more steam left?

Shares of FSN E-Commerce Ventures Ltd (Nykaa's parent) surged 18.64 per cent to scale their 52-week high of Rs 228.50 in Wednesday's trade. Last checked, the stock was trading 9.42 per cent higher at Rs 210.76. At this price, it has climbed 22.61 per cent on a year-to-date (YTD) basis.

Today's sharp rise in the share price came after positive management commentary on the June 2024 quarter (Q1 FY25) results. "Really happy to say that the GMV has come out at Rs 3,321 crore, which is a 25 per cent year-on-year (YoY) growth followed by revenue from operations growing at a similar percentage of 23 per cent YoY and represented at Rs 1,746 crore. Gross profit has come out at Rs 756 crore, similar year-on-year growth and EBITDA stands at Rs 96 crore, which represents about 5.5 per cent EBITDA margins. It's an improvement over previous year with 31 per cent growth in EBITDA," Nykaa's MD and CEO Falguni Nayar stated in an earnings call.

She also said that the key highlight for Q1 FY25 is that Nykaa continues to build its customer base. "Now our cumulative customer base stands at 35 million, which is a 33 per cent YoY growth. And brand partners on all our platforms, if you were to see, we deal now with 6,700 plus brands, both global and domestic brands. And we have added more than 1,500 brands in the last one year alone," Nayar mentioned.

On technical setup, support on the counter could be seen at the Rs 200-205 zone. And, resistance may be found in the Rs 220-230 range. With that being said, an analyst said investors can expect a further rise in the near term.

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, said, "The stock has made a breakout above the resistance zone of Rs 204 with huge volume participation. Investors can expect a further rise for next targets of Rs 240 and Rs 257 levels. The overall trend indicates strength. The near-term support will be at Rs 200."

Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, suggested that the stock has potential to hit Rs 230 in the near term. Keep stop loss placed at Rs 205 for this trade, Singh added.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Support will be at Rs 205 and resistance at Rs 220. A decisive close above Rs 220 level may trigger a further upside towards 235. The expected trading range will be between Rs 205 and Rs 240 for the short term.

As of June 2024, promoters held a 52.20 per cent stake in the online fashion retailer.