Shares of Nykaa (listed as FSN E-Commerce Ventures Limited) zoomed over 9 per cent to hit an intraday high of Rs 1,414 on BSE in an otherwise weak market on Wednesday.
The stock opened a tad higher at Rs 1,300 against the previous close of Rs 1,291.15. Market cap of the firm rose to Rs 66,280 crore on BSE. The shares stand higher than 5 day moving averages but lower than 20 day, 50 day, 100 day and 200 day moving averages.
It touched an all-time high of Rs 2,574 on November 26, 2021 and has tanked over 45 per cent from its all-time high.
Shares of new-age Internet companies including Zomato, Paytm, Nykaa and PB Fintech have been under tremendous selling pressure amid the ongoing brutal sell-off on Dalal Street.
"Stock market prices are purely based on sentiments in the short run. Long-term investors must remain focused on picking stories with low debt and consistent cashflows and that are trading at comfortable valuations among many other factors," Sreeram Ramdas, Analyst at Green Portfolio told Business Today.
"If a company's operating cash flows dent with an increase in interest rates and if they have close to NIL free cash flows, there are exactly the companies to be avoided at this point in time. And Nykaa is placed under this category for us irrespective of what the share price might do today or tomorrow," he added.
Kranthi Bathini, equity strategist at WealthMills Securities said, "The shares zoomed on the back of heavy volumes. We’re seeing some attempt at bottom-fishing here in terms of prices."
"Investors seeking a new entry point should hold off for a while longer, as there are many better equities available now on a risk-reward basis. Existing investors can keep their positions and wait for the price to average out," said Ashis Sarangi, SEBI Registered Investment Advisor at Pickright Technologies.
Nykaa shares got listed at a premium of 79 per cent to the issue price, marking a strong listing for the online beauty retailer. The company made its market debut at Rs 2,001 per share on the BSE against the IPO issue price of Rs 1,125.
The market cap of Nykaa breached the Rs 1 lakh crore mark after the stellar listing of the company on BSE and NSE.
FSN E-Commerce Ventures, the parent company of online beauty e-commerce platform Nykaa, reported a 58 per cent year-on-year (YoY) decline in its consolidated net profit for October-December at Rs 29 crore. Its net profit stood at Rs 1.2 crore in the preceding September quarter.
However, revenue from operations grew 36 per cent YoY and 24 per cent quarter-on-quarter (QoQ) to Rs 1,098.4 crore from Rs 808 crore in the October-December quarter of 2021.
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